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GST in Security & Safety sector

GST is purported to bring in the ‘one nation one tax one rate’ system. Its effect on various industries will be slightly different. There would be multiple statues whereby there could be one for Centre and one for State similar to the present VAT laws which are enacted in each state.


Actualy GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer. Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage.


The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages.


A senior industry player emphatically asked, “How can you ask the consumer to pay Rs.28000 as GST on a sale of Rs. 1 Lakh? It’s just too much!


Keeping in mind the federal structure of India, there will be two components of GST – Central GST (CGST) and State GST (SGST). Both Centre and States will simultaneously levy GST across the value chain. Tax will be levied on every supply of goods and services. Centre would levy and collect Central Goods and Services Tax (CGST), and States would levy and collect the State Goods and Services Tax (SGST) on all transactions within a State.


The input tax credit of CGST would be available for discharging the CGST liability on the output at each stage. Similarly, the credit of SGST paid on inputs would be allowed for paying the SGST on output. No cross utilization of credit would be permitted.


GST rates for goods at nil rate, 5%, 12%, 18% and 28% to be levied on certain goods. Products like CCTV Cameras and Recorders, Burglar and Fire Alarm systems and other related security gadgets falling under Chapter 85 of the Harmonised System of Nomenclature (HSN), which are considered as life safety goods have been placed in the highest bracket of 28% in the GST! What is shocking is that the government has clubbed these in the same bracket as entertainment electronics and other white goods.


Significantly the government in its quest for developing its Smart City Projects’ will need an active assistance of private players in security industry for installation of CCTV cameras, alarm systems and other life safety systems and if these are bracketed with other luxury products with a slab of 28% taxation, the price of these will automatically skyrocket. This say experts will almost certainly result in people shying away in installing these products, leading to more insecurity.


GST rates revised for 66 items when the  GST Council met on 11th June 2017 (Sunday). There have been countless recommendations from states and industries to reduce the rates on certain items. Finance Minister Arun Jaitley said that the rates were revised because the main idea behind GST rates was to maintain the rates as close to the original taxes. In some cases, this was not occurring. In some items, the reduction was required because of the changing nature of the economy and changes in consumer preference.


These items were earlier placed under high rates of GST (18-28%). On studying the list, it can be found that these items are necessities and not luxuries and so the GST council has reduced the tax rate on these essential items. For example, items like spectacles, exercise books and note books are a part of everyday life and cannot be placed in the highest tax bracket of 28% along with cars and cigarettes.


In special economic zones (SEZs) will lose some inherent advantages because there is no provision for upfront tax exemptions in the GST bill but “GST” could also generate business for large and small IT companies as organizations across the country reconfigure their IT systems to adhere to the new tax regime.


Till now the accounting software were restricted to just the Chartered Accountants, other than them everybody was either manually doing the invoicing or were bound to the traditional ways of invoicing. So, with GST thing everybody has to come down to an invoicing platform. So idea is to make it as simple as possible, yet compliant. So, everybody can use it from a layman and being compliant as well to the GST norms.


All services such as registrations, returns and payments will be available to the taxpayers online, which would make compliance easy and transparent. GST will help India improve its ranking in the ease of doing business.


The major features of the proposed payments procedures under GST are as follows:


i. Electronic payment process- no generation of paper at any stage


ii. Single point interface for challan generation- GSTN


iii. Ease of payment – payment can be made through online banking, Credit Card/Debit Card, NEFT/RTGS and through cheque/cash at the bank


iv. Common challan form with auto-population features


v. Use of single challan and single payment instrument


vi. Common set of authorized banks


vii. Common Accounting Codes


This is very good for the security & safety sector and industry as there will be good sale and service will be IT products and with lots of Jobs possibilities.




Arindam Bhadra is an eSecurity professional 11yr + in this industry. He is a good freelance blogger. His blog is now No 1. Blog in India. 3.0 L page viewer globally. Mr. Bhadra is an Electronics & telecommunication Engineer from IETE, New Delhi. He is a member of FSAI from 2011 & Go Beyond security from 2008. His blog arindamcctvaccesscontrol.blogspot.com focuses on security & Safety.


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