The government is looking to get services professionals such as plumbers, electricians and beauticians listed on online platforms onto the Goods and Services Tax Network, in what could be yet another move to bring gig economy workers into the fold of the formal workforce.
The Department for Promotion of Industry and Internal Trade ( DPIIT) is considering making it mandatory for online marketplaces such as UrbanClap, HouseJoy and Bro4u to only engage service professionals who have a GST Number or GSTIN, senior government officials in the know of the matter told ET.
While the majority of plumbers, electricians, individual fitness trainers that make use of such online platforms will have a turnover of less than Rs 40 lakh annually, exempting them from paying GST, the government’s move to mandate GSTIN is more in line with having a database of such professionals.
“Today, these professionals go into people’s houses and there’s absolutely no way for us to identify them,” said a senior government official. “While they may not have to pay GST or make the quarterly filings, if they are registered on the network, we can trace them if there’s any untoward event,” said a government official who did not want to be named. He added that companies such as UrbanClap may be asked to keep a log of all the jobs done by these services professionals, which were facilitated through their platform.
UrbanClap declined to comment as there was no formal communication from the government on the issue. Calls and messages to executives from Housejoy and Bro4u did not yield a response.
“There are several issues that we are examining like consumer safety and protecting the rights of these workers,” said another senior government official, who added that the DPIIT was currently evaluating the matter. “Even today, there is voluntary GST registration, so it’s not something very big that we are asking them to do.”
Discussions to get services professionals listed onto the GSTN come ahead of the e-commerce policy, which is expected to come out before the close of the current fiscal. Sources told ET that while the updated policy may dilute sections on data sharing, it could further define rules for online marketplace, inventory-led models and hybrid models.
The ministry of labour and employment is mulling bringing out regulations around the social security of gig economy workers. In its draft Code on Social Security, 2019, the ministry has proposed that all gig workers should be entitled to life and disability cover, health and maternity benefits, old age protection and other benefits.
India is not alone in trying to pass on benefits received by workers in the formal economy to gig and other unorganised sector workers. California became the first US state to pass a law that classified gig workers such as drivers on platforms like Uber as employees. Several other states in the US are now planning to have similar laws, which are also being seen as detrimental to the growth of new economy companies.