## RCM on Security Services

### Coverage

Security services (way of supply of security personnel) provided by any person other than body corporate to a registered person located in taxable territory → RCM.

### When RCM Does NOT Apply (FCM continues)

Even if the supplier is non-body-corporate and recipient is registered, RCM is NOT applicable if the recipient is:

1. Department or Establishment of Central/State Government

2. Local Authority

3. Government Agency that has taken registration only for deducting TDS u/s 51

4. Composition Taxable Person

In these cases, FCM continues to apply.

### Supplier Filter

RCM applies only if supplier is other than body corporate (i.e., individual, partnership firm, HUF, etc.).

If the security services are provided by a body corporate → always FCM.

### Decision Tree

```

Security Services

Is supplier a Body Corporate?

Yes → FCM

No → Is recipient a Registered Person?

No → FCM

Yes → Is recipient a govt dept/LA/TDS-only registrant/composition dealer?

Yes → FCM

No → RCM

```

Worked example

### Example 1

Example: RSA firm provides security services by way of supply of security personnel to XYZ Ltd. (registered, regular taxpayer).

→ Tax payable under RCM by XYZ Ltd. (supplier is non-body corporate, recipient is registered regular dealer).

### Example 2

Example: ABC Pvt Ltd. (body corporate) provides security services to PQR Ltd.

→ FCM by ABC Pvt Ltd. (supplier is body corporate, so RCM entry not triggered).

### Example 3

Example: Mr. Sharma (individual) provides security services to a Government Department.

→ FCM by Mr. Sharma (recipient is Government Department, RCM exception applies).

⚠️ Common exam mistakes

Applying RCM when security services are provided by a body corporate - body corporate suppliers are excluded from RCM
Applying RCM when recipient is a composition dealer or TDS-only registrant - these are excluded
Confusing 'security services' with 'security lending' - these are completely different entries
Forgetting that 'supply of security personnel' is the specific scope - other security services may follow different rules

Bare-Act text Entry 14 of Notification 13/2017-CT(R) · Notification No. 13/2017-CT(R) dated 28.06.2017 · click to expand

Security services (services provided by way of supply of security personnel) provided by any person other than a body corporate to a registered person located in the taxable territory - tax shall be paid on reverse charge basis. Exclusions: (a) Department or Establishment of CG/SG/UT; or LA; or Government agencies which has taken registration only for the purpose of deducting tax under section 51; (b) a registered person paying tax under section 10.

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RCM - Security Services (Supply of Security Personnel)

Worked example

⚠️ Common exam mistakes