Security services tenders in India: PSARA licence, GST reverse charge, and how bidding works

Short answer: Government offices, PSUs, banks, airports, universities, hospitals and municipal corporations buy security-guarding and manpower-supply services as a tender, almost always requiring a valid PSARA licence from the agency, plus EPF/ESI and labour-law compliance. GST on security services is commonly charged under reverse charge when the supplying agency is not a body corporate, which changes who pays the tax on the invoice. Pricing is built up per guard per month from the state minimum wage plus statutory contributions, not negotiated down from a round number. Rules and current rates are set by the specific state and tender, so treat this guide as a map and the tender's own clause as the source of truth.

Who buys security services, and how is the tender usually evaluated?

Government departments, PSUs, public-sector banks, airports (for areas outside direct CISF cover), universities, hospitals, housing boards and municipal corporations all run their own security and housekeeping-manpower tenders, usually on the state e-procurement portal, CPPP or the buyer's own site. Evaluation is most often lowest-rate (L1) on the per-guard-per-month rate for a defined manpower strength and shift pattern, though sensitive sites (banks, airports, data centres) sometimes use a quality-weighted or two-envelope method that scores the agency's training, strength and track record alongside price.

The PSARA licence: the one non-negotiable gate

The Private Security Agencies (Regulation) Act, 2005 makes it mandatory for any person, firm, LLP or company to hold a licence before supplying private security guards, supervisors, bouncers or armed/unarmed guarding services. Three practical points:

1. The licence is issued per state, by that state's controlling authority (usually the state home department or police). A licence from one state doesn't automatically cover deployment in another — check the tender's location against your licence's coverage before bidding.
2. It is commonly renewed on a fixed cycle set by the state rules; an expired licence at the time of bid submission is a standard ground for rejection, so track the renewal date the same way you would an EMD or turnover certificate.
3. It sits alongside, not instead of, your other registrations — GST, PAN, EPF/ESI codes and (where the tender requires) a labour licence under the Contract Labour (Regulation and Abolition) Act are all checked separately.

Our document checklist for Indian tenders covers how to track certificates like this with expiry dates so a bid isn't rejected for a lapsed licence.

GST reverse charge: the detail specific to this vertical

Most service tenders don't have a GST quirk worth a dedicated section — security services do. Notification No. 29/2018-Central Tax (Rate), effective 1 January 2019, put security personnel services under reverse charge when supplied to a registered person by anyone other than a body corporate: the recipient (the buyer) pays the GST directly to the government rather than the agency charging it on the invoice. If the agency supplying the service is itself a body corporate (most private limited companies, and LLPs under some advance rulings), the agency charges GST on a normal forward-charge basis instead.

This matters for pricing and invoicing, not just compliance: a reverse-charge invoice looks different from a forward-charge one, and quoting or invoicing on the wrong basis can create a real tax dispute with the buyer after award. Confirm which basis applies to your exact business structure with your tax consultant before you submit a commercial bid, and note any instruction the tender itself gives on GST treatment.

How a per-guard rate is actually built up

Most security tenders ask for this break-up in a prescribed format (sometimes called a manpower cost sheet) rather than a single all-in rate — matching the tender's own format exactly is as important as the number itself.

A realistic first security-services tender, end to end

1. Hold a current PSARA licence covering the state(s) you want to bid in, plus EPF/ESI codes and GST registration.
2. Build your document vault once: PSARA licence, EPF/ESI registration, past contract completion certificates, manpower strength proof, and your standard rate break-up template.
3. Check the tender's manpower strength and shift pattern against what you can actually staff and supervise before bidding — under-resourcing a winning bid is a common cause of penalty and blacklisting in this vertical.
4. Price the per-guard rate from the statutory floor up, never down from a target number, and confirm the correct GST treatment for your invoice before submitting the commercial bid.
5. Submit on the buyer's portal with the manpower cost sheet in the exact format asked for, and track corrigenda on wage-rate revisions, which are common mid-tender.

Grovia Tender runs steps 2 to 4 for you: Company DNA stores your PSARA licence, labour registrations and past contracts once, eligibility is checked with evidence against each tender's actual clause, and the technical response and compliance checklist are drafted from your own vault. Holding the licence, staffing guards and final GST treatment stay with you.