Implications of GST on security management industry

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The Security and Facility management business (SFMB) is one of the major sectors which fuels the economy with gainful employment opportunities. The implementation of GST will initially have a minimal impact, which over a period of time will increase the certainty and ease of doing business. With the current service tax rate pegged at 15% including cess, with GST it will be increased to 18% which will result in the increase in working capital requirement. As the security industry does not receive substantial input tax credits given the fact that almost 90% of the cost is towards salary of guards, due to increase in rate of tax, working capital shall correspondingly increase by almost 2-3%. Cost of increased funding shall be taken into account while renewing the contracts in the GST regime.

About Company :

The Tenon Group of Companies is an Integrated Security & Facilities Management Corporation, which has presence in 3 countries and spread across India with over 55,000 employees in 71 branches, providing comprehensive range of services to more than 1900 + corporate. Founded by Major Manjit Rajain, the company started with manned guarding services – Peregrine Guarding in 1995, which quickly established itself as the premier establishment in this space. It has been independently rated by KPMG, EY and Deloitte as amongst the top 5 service providers in the country. Tenon Group’s In house model is a cost effective delivery model which reduces different layers of management fee to bare minimum levels as compared to other IFM and security companies.

The services offered by Tenon Group broadly comes under 3 categories –

Security Services

Our 2 brands which offer security services are – Peregrine Guarding in India and Peregrine Frontline Security in Singapore. Peregrine provides integrated security solutions in Physical Security, Electronic Security, Risk Assessment Consultancy, Executive Protection, Event Security and Remote Surveillance Command Center. Peregrine has the ability to deliver high quality services across the entire spectrum. Peregrine Frontline Security is a leading provider of security services in Singapore. Besides, it provides close protection officers, security systems and technology solutions to customers across 73 sites in Singapore. It provides security management, consultancy services and training, as well as supplying a wide range of security and surveillance products including CCTV systems, GPS tracking systems, metal detectors, biometric time and attendance systems, and under vehicle surveillance systems.

Facilities Management Services

Facilities Management Services are delivered through Tenon Facilities Management in India and in UK. The full range of facilities management services include soft services like cleaning to high-end specialist services like workplace management and unique services like Critical Systems Engineering Building Operations & Support Services. Tenon has been providing facilities management services for a wide range of public and private sector businesses. The clients include some of the world’s most respected blue chip and home-grown companies. The hard services such as predictive mechanical and electrical maintenance services, HVAC management and AMC (Annual Maintenance Contract) services is delivered through a wholly owned subsidiary – Rotopower Projects.

In UK the FM Company has a niche segment in the market dealing with commercial and office facility management, encompassing soft and hard services. It has a leadership position in servicing Universities and Ministry of Defense besides multi tenanted office accommodation & blue chip commercial clients.

Remote Surveillance Services

Remote Services is offered through the state of the art Soteria Command Center. The Soteria Command Center is a business tool that predicts, manages, analyses and communicates the environmental deviations for certain events .These events can be controlled & monitored in a defined and a managed environment. It provides unique real time remote monitoring which utilizes predictive event analytics and proactive response management that facilitate in alleviating business risks. The service not only assist clients in preempting any critical or non- critical challenging security related incidents but also provides them with vital information on any impending situations.

Mr. Sandeep Gupta, Group CFO, Tenon Group of Companies
Mr. Sandeep Gupta, Group CFO, Tenon Group of Companies

The Security and Facility management business (SFMB) is one of the major sectors which fuels the economy with gainful employment opportunities. The implementation of GST will initially have a minimal impact, which over a period of time will increase the certainty and ease of doing business. With the current service tax rate pegged at 15% including cess, with GST it will be increased to 18% which will result in the increase in working capital requirement.