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Indian Staffing Federation seeks lower GST from 18% to 5%

Indian Staffing Federation seeks lower GST from 18% to 5%

The Indian Staffing Federation has asked the government to lower goods and services tax on staffing companies from the current 18% to 5% besides seeking separate industry status for the sector to help them avail certain special privileges.

“Staffing companies generate employment and in a majority of the cases these are low-level jobs with average salaries of under Rs 18,000. So in line with the philosophy of the GST council, the rate applied should be the lowest slab,”Lohit Bhatia, president, Indian Staffing Federation said in its pre-budget expectations to the government.

Further, ISF said the government should introduce a lower tax deduction rate of 0.05% for staffing companies as this will assist the process of application and remove the challenges arising in the face of rufends due to the nature of business of staffing industry.

“This will save cash flow problems for the staffing industry and the government will save time and adjustments,” Bhatia said. According to Bhatia, the existing TDS rate is 2% which needs to be reduced to a statute rate of 0.05%.

Further, Bhatia said there is a need to recognize staffing as a separate industry rather than being part of professional services. “This will allow staffing companies to seek certain privileges keeping in mind the low margins and high cash outflow that they make when compared to other professional services companies,” Bhatia added.

The Indian Staffing Federation is the apex body representing flexi staffing companies, formed to provide a platform for recognized employment, work choice, even compensation, social security and health benefits for the temporary workforce; that constitutes a sizable segment of India’s total workforce.

ISF claims its over 100 federation members have so far generated employment for over nine million employees over the last 10 years and currently employ over one million flexi staff annually.

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