Service tax on service provided by security agency by placing guards etc in the clients building etc, Service Tax

[shyamal roychowdhury]

My client is a security agency providing security services by placing Guards ets in the clients building, factory gate etc. This is relting fy 2005-06 . ( Does it vary if it is any other F.Y ) The clent here is an 100% E.O.U. They are of opininon that they are covered by circular no 56/05/2003 dated 25/04/2003 .They claimed that in the case of secondery services , the same is merged with the services that are exported & thus notliable for service tax .& hence they didnot pay service tax . and my client also didnot pay tax. Now the dept levied penalty for short payments etc ordering that secondery services like guarding building etc do not merged . Can any one one give some infrmation weather dept is right & we have to pay penalty .

THANKS

ROYCHOWDHURY

Posts / Replies

[Dinesh Gupta]

After introduction of Export of Service Rules, 2005 and cenvat credit rules, 2004, the above circular became meaning less. But you may try to take the benefit of circular as long as possible since this circular was withdrawn with effect from May 10,2007