Budget 2024 staffing industry's wish list: Tax breaks, skill development, and PF reforms
staffing industry and human resources (HR) industry is anticipating significant tax breaks and increased investment in skill development from the upcoming budget for FY25, which union finance minister Nirmala Sitharaman is expected to present on July 22, 2024.
Currently, the Goods and Services Tax (GST) on employment services in India stands at 18%, applicable to a broad range of services, including executive search and recruitment services, permanent placement services, and contract staffing services.
According to Suchita Dutta, executive director at the Indian Staffing Federation (ISF), employment-related services should be considered under ‘merit services’ with a 5% GST.
The Employees' Provident Fund (EPF) and Miscellaneous Provision Act mandates that employers pay contributions within 15 days of the close of each month, with appropriate action taken by the commissioner for non-compliance. However, experts note that in the staffing industry, payments often depend on inputs from the principal employer, leading to delays in statutory payments.
«As these delays are not directly attributable to the staffing companies, we urge the government to consider waiving this clause, especially for staffing service providers,» said Nagesh Bailur, Chief Financial Officer of Randstad India.
Bailur also proposed reducing the monthly PF contribution from 12% to 5% to increase employees' disposable income.
The current economic climate, characterized by rising inflation and increasing costs of essentials, has complicated
