GST Number Soon to be Mandatory for Gig Economy Workers

The government aims to register professionals working via online platforms such as electricians, beauticians, and plumbers under the Goods and Services Tax Network. The Department for Promotion of Industry and Internal Trade (DPIIT) is contemplating to make it compulsory for online marketplaces (UrbanClap, Bro4u, HouseJoy, BigBasket, other mobility startups, etc.) to employ only service professionals who have a GST Number or GSTIN.

As of now, the aim is to get these employees into a controlled system so that their information, qualifications, and credentials are documented. Also, the objective is to make sure that the jobs they were allocated with and the jobs they have executed are registered. This move is looked at from the viewpoint of general public safety and ensuring that in case anything undesirable occurs, it can be traced back to the gig economy worker who performed the job.

Also, the government is planning to provide these gig economy workers with health and maternity benefits, life and disability cover, old age protection and other kinds of benefits. This is because currently, these transient workers function more or less like freelancers; they are not entitled to any benefits apart from the payments they get for the work they perform.

Also Read: Gig Workers Likely to Get Healthcare Protection Under Labour laws

This proposal is part of the Social Security Code Bill proposed by the government. In December 2019, the bill received approval from the Union Cabinet and proposed the creation of a social security fund via a corpus available under corporate social responsibility. The Indian government is planning on extending worker benefits to gig economy workers under the state-run Employees’ State Insurance Corporation (ESIC). On implementation, this will be the first time gig economy workers will get to avail the worker benefits rendered by ESIC.

The service workers may not qualify for GST or to file returns on a quarterly basis, but by registering them under GSTN, it will be easy for the government officials to trace these workers when there is an unfortunate incident.

Concerning this move, the government and political heads might receive the required support from the workers; on the other hand, modern businesses may feel choked with so many restrictions being forced on them.

For any clarifications/feedback on the topic, please contact the writer at bhavana.pn@cleartax.in