Sunday, February 23, 2020

How can any gig worker earn over Rs 4 million?

A recent study over a 13 year period by Laveesh Bhandari and Amaresh Dubey found that "non-contractual employment grew by 68 million over the period", wrote Nitin Pai. "There were 145 million people in non-contractual employment in 2017-18", so that "Indians constitute a quarter of the world's gig workers, earning $1 billion last year and registering double digit growth". Ominously, "Recent reports suggest that revenue officials are leaning on platforms and aggregators to get gig workers registered with the goods and services tax (GST) network." Why? According to the GST law, only those whose income exceed Rs 4 million per year need to register for GST. Do officials think that those who deliver food for online companies earn over Rs 330,000 per month? Even if drivers working for Uber earn Rs 4,000 per day, their earnings are not enough to register for GST and they would be paying large sums to banks to repay their loans and will get nothing if they are off sick. The GST system is so complicated that none of these people can have a clue on how to file their returns and would have to pay accountants over half of what they earn. If they don't or if there are mistakes in filing returns they will face enormous penalties. A poor 'kachor wala' (one who sells fried snacks) in Aligarh was raided by officials for not registering for GST. The alleged millionaire kachori wala turned out to be extremely poor, living in a 225 sq ft shack, with few material possessions. Money raised by GST is supposed to be shared equally between the Center and the states because sales tax, octroi and other taxes imposed by states to raise revenue were subsumed under GST. "Shortfalls were to be met via the 'compensation cess', which is an additional tax levied on five 'sin' products: sports utility vehicles, tobacco, aerated water, coal and cigarettes." There is a limit on how high taxes can go because as prices rise the number of users starts to decline, resulting in tax collection remaining static or even declining. "The Central government has defaulted on the bi-monthly compensation payment, due in October, without any notice or explanation. Now in December-end yet another bi-monthly instalment is due which would make unpaid compensation to the States Rs 35,000 crores," wrote TM Thomas Isaac.  "Numerous studies have shown that state expenditure, especially capital expenditure, is a major contributor to gross domestic product (GDP) growth," wrote Rajrishi Singhal. Not just GST compensation, the Center is not paying the states for its own subsidy schemes. ""The funds released for Jal Jeevan Mission were at 51%. PM Kisan at 57%, Ayushman Bharat at 32%, and the Poshan Abhiyan at 31% of total allocations by November/December 2019," wrote  Yamini Aiyer. Trying to extract taxes out of gig workers will kill gig work and destroy online retail. After all you can't squeeze blood out of stone

4 comments:

Mr.Kiraann said...

Hi There,
I found your Content very useful, Thank you for sharing with us!
We are One of the Top Accounting Firm in India, You can GST Registration Online here.

Thank you.

kanakkupillai said...

Hi, This Article is very nice, Thanks for sharing, We provide Trademark Registration in India, If anyone need let me know.

Chennai Filings said...

Hi There,
I found your Content very useful, Thank you for sharing with us!
We are one of the best Business Registration Service Providers in India, You can FSSAI Registration Online With us, We will provide these services at the best price.

Ravi said...

I have just gone through your Article, It's really interesting.
Please check my blog on Income Tax Return Filing, and Pls let me know your thoughts.