Staffing firms have made a pitch for reducing the goods and services tax (GST) on employment services to 5% from 18% now and sought industry status for their sector.
The Indian Staffing Federation (ISF) met top officials of the department for promotion of industry and internal trade (DPIIT) to discuss issues faced by the sector and to press for these demands.
The ISF has said services towards employment must be considered under merit services, arguing that they operated on low margins. It pointed out that gross margin for almost all contract staffing companies varied between 2% and 8% and the net margins were significantly lower than that.
“If the government could consider the request for such service to be put at a lower slab of 5% under the GST regime, staffing companies could facilitate organised employment for more industries,” it said.
“The current categorisation at 18% slab, which is next to the luxury goods category of 28%, is a deterrent to the growth of employment,” it said, adding this will help principal employers to divert the additional cash flow to deploy towards reimbursement of salaries.
According to ISF, there are 6.23 million organised contract staff in India employed through organised contract or temporary staffing firms.Bottom of Form
Source #ET
