Does Every Security Agency Need a PSARA Licence?

The governing rule: a PSARA licence is mandatory for the business

PSARA is the Private Security Agencies (Regulation) Act, 2005. It requires any person or entity that carries on the business of a private security agency, meaning providing private security guards or security services to a client for consideration, to hold a valid licence granted by the State Controlling Authority. The licence is tied to the state: a separate licence is generally required for each state in which you operate, and fees and validity periods are set by each state, so they must be checked against that state's own rules. The Act also requires that the guards you deploy meet its training and character or antecedent verification requirements.

The exception that usually applies: it is about scope, not headcount

PSARA regulates the business of providing security to others, so the exception turns on what you supply rather than on how many guards you have. Two situations commonly sit outside it. First, a firm that supplies only general, non-security manpower, for example housekeeping, drivers or office staff, is not running a private security agency, so PSARA does not apply to that activity (though the contract-labour regime still can). Second, an organisation that deploys its own employees to guard its own premises, and does not supply guards to third parties, is generally not carrying on the business of a private security agency. Because this turns on the statutory definition of 'private security agency', confirm your specific case against the Act and your state's rules before relying on the exclusion.

PSARA does not replace the contract-labour licence: the two stack

A PSARA licence does not substitute for the labour-law licence. If you supply security guards to a client, you are also supplying contract labour, so the Occupational Safety, Health and Working Conditions Code, 2020 applies. Under Chapter XI, a manpower supply contractor that meets the applicability threshold must hold a contractor licence under Section 47, issued by the licensing authority, and that threshold is set by the Code and the state notification, so the applicable number must be checked against your state's rule. In practice a security-supply firm commonly needs both a PSARA licence and a contract-labour or manpower-supply licence.

What else runs alongside for a security-supply firm

Several tax and social-security obligations run with the licences. Security services attract GST at 18 percent. Where the supplier is a non-body-corporate and the recipient is a registered person, GST on security services is paid by the recipient under the Reverse Charge Mechanism (Notification 13/2017-Central Tax (Rate) as amended by 29/2018, effective 01 January 2019); general manpower supply is not under reverse charge by default. Payments to the contractor for supply of labour attract TDS under Section 194C of the Income-tax Act. The guards you employ are covered by EPF and ESI in the normal way, and you remain responsible for paying their wages.

Illustrative example

Illustrative example: A firm places security guards at client sites in two states. Because PSARA licences are granted state by state, the firm generally needs a PSARA licence from the controlling authority of each of those states, in addition to any contract-labour or manpower-supply licence that applies. The exact fees and validity for each state must be checked against that state's rules; they are not fixed here.

Action step

Confirm first whether you are supplying security services to clients (PSARA applies) or only general manpower (PSARA generally does not). If you supply security, apply for a PSARA licence to the State Controlling Authority in every state where you operate, and make sure your guards meet the training and verification requirements. In parallel, check the OSH Code Chapter XI contract-labour or manpower-supply licence threshold for each state and obtain that licence where it applies, and put GST, TDS under Section 194C, and EPF and ESI compliance in place. Verify every state-specific fee, form, validity period and threshold against the current notified rules before acting.

Sources and status

Sources: Private Security Agencies (Regulation) Act, 2005; Occupational Safety, Health and Working Conditions Code, 2020, Chapter XI (Sections 45 and 47); Notification 13/2017-Central Tax (Rate) as amended by 29/2018 (GST reverse charge on security services); Section 194C, Income-tax Act, 1961; Code on Social Security, 2020 (EPF and ESI). Last verified: 20 September 2026. This page is general information, not legal advice; licence fees, validity, forms and thresholds vary by state and change over time, so verify against the current Act, rules and notifications for your state before acting. Reviewed by: pending named legal review.

Key points

• A PSARA licence is mandatory for the business of providing private security guards or services to clients; it is issued by the State Controlling Authority.
• A separate PSARA licence is generally required for each state where you operate; fees and validity vary by state and must be verified locally.
• Guards must meet PSARA training and character or antecedent verification requirements.
• PSARA is separate from and additional to the contract-labour or manpower-supply contractor licence under OSH Code 2020 Chapter XI (Section 47); supplying security guards can trigger both.
• Security services carry 18 percent GST; where the supplier is a non-body-corporate and the recipient is registered, GST is paid by the recipient under Reverse Charge (Notification 13/2017 as amended by 29/2018).
• General non-security manpower supply, and purely in-house or captive security not supplied to others, generally fall outside PSARA, but the OSH Code contract-labour regime can still apply where thresholds are met.
• Payments for supply of labour attract TDS under Section 194C; EPF and ESI apply to the guards as to any employees, and the firm remains responsible for their wages.

Related questions

Check for your state

• PSARA licence fees, validity period and renewal cycle vary by state and are not fixed in the source pack; verify against each State Controlling Authority's notified rules.
• The exact statutory definition of 'private security agency' and the in-house or captive exclusion should be confirmed against the PSARA Act and state rules before relying on the exception.
• OSH Code contract-labour and manpower-supply licence thresholds (principal-employer registration and contractor licence) vary by state notification; the applicable number must be checked against your state's rule.
• Exact PSARA guard training hours and verification requirements are set by state rules and are not restated here.
• GST reverse-charge applicability depends on the supplier's constitution (body corporate or not) and the recipient's registration status; confirm the transaction facts before applying it.