The Central Board of Customs and Excise (CBEC) has widened the coverage of situations wherein service tax is payable under reverse charge mechanism, by including Directors Services and Security Services.

CBEC has introduced two notifications effective from August 8, 2012 to add Directors Services and Security Services to the list of services for applicability of service tax under Reverse Charge Mechanism.

"As per new provisions, if the company is making any payment to the directors of the company for his service provided to the company, then the company is liable to pay service tax. The POT for service under reverse charge is date of payment (provided payment is made within 6 months from date of invoice)," informs BDO India, a member firm of global consulting firm BDO .

"It may be noted that company can avail CENVAT Credit and utilize the same against their output service tax liability subject to compliances/restrictions under the CENVAT Credit Rules, 2004. A company is required to discharge service tax liability under reverse charge in cash," it adds.

In lines with the new provisions of partial reverse charge made applicable to services of manpower supply, security services provided by specified service providers would also attract partial reverse charge.

The term "Security Services" means services relating to the security of any property, whether movable or immovable, or of any person, in any manner and includes the services of investigation, detection or verification, of any fact or activity".

Thus, the activity of supply of security guards, including services of investigation, detection, verification of fact or activity would be liable to the provisions of reverse charge.