GST on manpower and security services, including reverse charge

This guide goes deeper into the tax side of a manpower bill: the rate, reverse charge conditions and exceptions, what the invoice must say, CGST and SGST versus IGST, and contracts that mix services. For building the bill itself, see how to bill a client for manpower.

What GST rate applies to manpower and security services?

Notification 11/2017-Central Tax (Rate) taxes "support services" under heading 9985 at 9% CGST, which with 9% SGST (or 18% IGST) makes 18%. Security services and supply of manpower fall under this heading; your CA will give you the exact service code for your invoices.

The GST Council's 56th meeting changed many rates from 22 September 2025. Its list of service rate changes covers headings such as 9954, 9964, 9986 and 9997, but not 9985, so manpower and security services stay at 18%. Do not confuse 9985 with 9986, which covers support services to agriculture, mining and oil and gas.

When does reverse charge apply to security services?

Notification 29/2018-Central Tax (Rate) added "security services (services provided by way of supply of security personnel)" to the reverse charge list from 1 January 2019. All three conditions must hold:

The notification then excludes two kinds of recipient, who do not pay under reverse charge:

• a government department, local authority or government agency that is registered only to deduct tax at source (under section 51);
• a registered person paying tax under the composition scheme (section 10).

In plain terms: a proprietor or a partnership firm supplying security staff to a regular GST-registered business does not charge GST; the business pays it. A company supplying the same staff charges GST normally. Whether your particular entity counts as a body corporate is a question for your CA.

Who pays GST in each situation?

What must the invoice say under reverse charge?

Under section 31 of the CGST Act read with rule 46 of the CGST Rules, every tax invoice must state whether tax is payable on reverse charge. Under reverse charge you still issue a proper tax invoice with your GSTIN, the client's GSTIN, invoice number and date, place of supply, the service description and code, and the taxable value. Many agencies also show the tax amount for information with a note that it is payable by the recipient on reverse charge, without adding it to the amount the client pays them. Agree the exact wording with your CA.

For the client, the GST Council's guidance notes that tax paid under reverse charge can be taken as input tax credit if the client is otherwise eligible. That is one reason most registered clients accept reverse charge billing without argument.

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Worked example: the same bill under forward and reverse charge

Taxable value ₹1,96,880 for one month of security staff at one site, client in the same state:

You can check the forward-charge total in the site billing calculator; for reverse charge, enter 0% GST to see what the client pays you.

CGST and SGST, or IGST?

If the place of supply is in the same state as your registration, the 18% is split into 9% CGST and 9% SGST. If it is in another state, the whole 18% is IGST. When a client in another state takes staff for a site in your state, or the reverse, the place of supply can be less obvious; ask your CA, and make sure you are registered in each state where the rules require it. The manpower bill format switches between CGST and SGST and IGST with one cell.

What if one contract covers security and housekeeping staff?

Reverse charge applies only to the security services entry. If a contract supplies both security staff and housekeeping staff, the two may need different treatment on the same bill: reverse charge for the security lines (if the conditions hold) and forward charge for the housekeeping lines. Show the services on separate lines with their own values. Whether a bundled contract is one supply or several is a legal question with tax consequences, so get your CA's view before you issue the first invoice, and keep the treatment consistent every month.

How does reverse charge affect your cash flow and pricing?

• Smaller invoices, same margin. Under reverse charge you collect the taxable value only. Your margin does not change, but receivables look smaller.
• Input tax credit. Under forward charge you can usually set GST on your inputs against the GST you collect. Under reverse charge you collect no output tax on those lines. Discuss with your CA how this affects you.
• Quote both ways. When you bid, state clearly whether your rate is before GST and who will pay it, so the client compares like with like.

Sources

• Notification 11/2017-Central Tax (Rate): rates for services, heading 9985
• Notification 29/2018-Central Tax (Rate): reverse charge on security services
• GST Council, 56th meeting: rate changes from 22 September 2025
• GST Council flyer: reverse charge mechanism (invoice wording and credit)

This guide explains the rules in plain language. It is not legal or tax advice. Laws and rates change, so confirm the GST treatment of your contracts, entity and clients with your CA before you act on it.