Professionals offering services such as electricians, plumbers or beauticians through online platforms referred to as gig economy workers may be mandated to take a GST registration and come onto the Goods & Services Tax network (GSTN). This does not mean they need to charge or pay GST until their revenues reach the threshold limit of ₹40 lakh a year. However, the government is mooting this idea with multiple purposes. This category of workers is more like freelancers and don’t enjoy any benefits other than the payments they receive for the work they execute. If they are referred through sites like Urban Clap or HouseJoy or Bro4u, then they may have to part with a portion of the amount collected from the customer. The government appears to be planning on providing them life and disability cover, health and maternity benefits, old age protection and other benefits.
That may be the future plan. For now, the purpose being indicated is that these workers must be brought into a regulated regimen so that there is a record of their details and credentials and a record kept of the jobs they were assigned and completed by them. This is looked at from the general public security perspective and ensuring that where something undesirable has occurred, it may be traced back to the gig economy worker who handled the job.
The way the government may bring this about is to make it mandatory for operators like UrbanClap to only engage those professionals who have a GST registration.
From the government side, the Ministry of Labour and Employment and the Department for Promotion of Industry and Internal Trade (DPIIT) are both involved in working on the modalities of creating the policy framework on these lines.
It may be recalled that the state of California, in the US, recently passed a law which mandated that gig economy workers, which included drivers employed by cab aggregators like Uber, should get covered under the benefits being enjoyed by those in the formal economy. Uber is contesting it there.
These actions are double-edged swords. While the government and the political bosses may gain the support of the workers, the modern businesses may feel stifled with so many restrictions being imposed on them.