Government Assured Relief in GST Rate for Private Security Industry at FICCI PSIC – 2018

ficciWhile inaugurating the FICCI – Private Security Industry Conclave on 3 August 2018, Shiv Pratap Shukla, Minister of State for Finance, GoI, assured the private security industry that the Finance Ministry is actively considering FICCI’s recommendations to reduce the GST rate levied on the private security agencies to minimise its impact on the industry and capitalise on its job-creation potential. FICCI organized its annual event PSIC – 2018 on the theme of – ‘Job Creation & Skill Development.’


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There is a merit in the demand for reduction of GST rate to 5% as this industry generates about 5 lakh jobs yearly. Moreover, security is no longer a luxury but a basic essential for the citizens of the country. If we aim to cultivate a strong economy, the basic entitlements of  the citizens cannot be compromised. 

– Rituraj Sinha
The Chair of FICCI Committee on Private Security Industry, & Group MD, SIS Group


Mr. Shukla said that the government acknowledges the contributions of the private security industry in creating jobs for the poor, ex-servicemen and those who have migrated from villages, and promised that he would do the best possible to reduce the tax. He invited a FICCI delegation to his office to discuss and take the matter further.

Mr. Shukla also released a FICCI-BDO Report relating to PSI that dwells upon the skill development and jobs creation, policy issues, GST implication and its impact, shift from the unorganized to organized sector, and the need of integration of manpower and technology.

Since its inception, the Goods and Services Tax (GST) has been a major impediment for the Private Security Industry in India which is one of the largest employment generating industries of the country. At the PSIC 2018, the FICCI Private Security Committee, which has been in consistent pursuit with the government on GST, reiterated the issue and sought a roll down of the GST rate from 18% to 5% slab.

Rituraj Sinha, the Chair of FICCI Committee on Private Security Industry, and Group MD, SIS Group pointed out that there is a merit in the demand for reduction of GST rate to 5% as this industry generates about 5 lakh jobs yearly. Moreover, security is no longer a luxury but a basic essential for the citizens of the country. If we aim to cultivate a strong economy, the basic entitlements of the citizens cannot be compromised.

Private Security has emerged as an essential service to support the government machinery in homeland security activities. With a reduction in tax, pressure from customers on manpower reduction is likely to ease significantly and that will result in job protection for private security guards. A lower rate is also likely to boost the volume of work orders, thereby paving way for demand expansion, and the resultant increase in skill development activities as well as employment generation by the private security sector

Mr. Sinha clarified that they find a genuine intent on the part of the government to pass GST relief to the industry that would benefit the small players as well who are bearing an additional burden of the cost of interests on the amount of GST that they borrow to pay the levy in advance.

Major Manjit Rajain (Retd.), Co-Chair of FICCI Committee on PSI & Chairman, Peregrine Guarding, was also optimistic about the serious inclination on the part of the government to give GST relief to PSI.

Sandip Somany, Senior Vice President of FICCI, and Vice Chairman and MD, HSIL Ltd. opined that the private security agencies are mainly SME segments that operate on very thin margins. It is challenging for them to cope with the requirements of the GST compliances, as the high GST rate of 18% has imbalanced their cash-flows.

FICCI’s recommendations on GST relief are pending with the government from the past few months.


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