Private security industry feels the pinch of GST.

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The Central Association of Private Security Industry (CAPSI) on Monday opposed the collection of Goods and Service Tax (GST) from service provider and demanded that it be received from the service receiver, instead.

The Association threatened to sit on dharna in front of the GST commission in every state on July 18 in support of their demand.Talking to media persons here, National Chairman of CAPSI, Kunwar Vikram Singh said about 5000 Managing Directors (MD) of private security agencies would sit on dharna across the country in various states, as the collection of 18 percent GST on salaries of employees (security guards) from private security agencies has compelled 812 companies to shut down in the past one year.

He said the manpower and statutory costs constitute 90 percent of the billing and the operating margins are low, ranging between 5- 10 percent. The two per cent tax deducted at source eats into the margin further. Singh said the Private Security Industry is paying salaries and other benefits like Providend Fund and Employee State Insurance to all employees on time every month. “It is virtually impossible to pay GST before 20 of every month as payments for security service is received after 60 or 90 days,” he said.

Singh shared that there are 22,000 private security agencies in the country, including around 100 in Himachal. “These agencies are mostly run by ex-servicemen, giving jobs to eight million people with a growth rate of 22 percent,” he said.

He held the GST binding at the level of service provider would not only lead to closure of companies, but would also increase unemployment as large number of poor, semi-literate rural youths would lose their jobs.

Holding that such decisions would prove to be counterproductive to initiatives taken for ease of doing business as there is a demand of eight million guards worldwide,   President of Himachal chapter of CAPSI, Ghanshyam Pandit said a memorandum would be submitted to Chief Minister Jai Ram Thakur on July 18, requesting him to raise the matter in the meeting of GST council of which all the state are members.

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