FICCI Writes to FM Asking GST Relief for Business Service Sector

FICCI writes a letter to FM Nirmala Sitharaman highlighting the saturated position of the business service segment due to the COVID-19 outbreak in India. The business association (FICCI) stressed upon the urgent need for relaxations like GST rate cut, PF contribution support for the business service segment. The sector having the total employee accumulation of one Crore approx is made up of manpower supply, private security, cash logistics business, and hygiene & sanitation management industries.

The sector consisting of around 10,000 plus small and medium enterprises (MSMEs) View the impact of GST law on startups and SMEs (small and medium enterprises) in India. The tax will provide great relief to these companies (experts reveal). Read More holds the position among the top three contributors of GST with a total of Rs. 25,000 paid just as tax in the previous year. Also, the sector outsources its services abroad bringing in a wealth of around Rs. 1 lakh crore per annum to the nation. Above all, the sector even claims very less ITC if compared to other sectors of India’s giant business market.

FICCI on behalf of the business service sector has requested the government to financially support 35% of the wages of at least 50% of the employee group for the coming three months and six months for 25% of the workforce. The accomplishment of the said relief is mandatory for upholding the employment level in the sector, said Rituraj Sinha (chairman FICCI Committee on Private Security Industry) in the letter to the Finance Minister.

A critical downfall is expected in the aggregate revenue from the sector in the upcoming months due to the COVID-19 outbreak, this might call for the cut off in the employees’ list (fewer jobs), the letter said. For the sector with such low-profit margins and high investment on employees, it is very hard to pay the wages of 1 Crore workers serving the sector and above that, the customer number is constantly declining and there are cases of delayed payments, stated in the letter. Besides demanding compensations for employee wages, FICCI also urged to liberate the sector from GST levy as the sector is expected to witness the 3-4 delay in its monetary collection.

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“We do not have resources to ensure GST compliance as per norms under prevailing circumstances,” it said, adding given the wafer-thin margins of the sector, working capital credit should be extended at subPrime Lending Rate, the letter by FICCI stated. The banks must be instructed not to hinder the revenues and ensure that they maintain Q4 FY 20 service revenues for the period March to September 2020. Just like Rs. 50 lakh was given to government employees, a relevant health insurance cover must be given to the security guards, hospital staff, cleaning staff, fumigation workers, cash/van ATM crews who are risking their lives and dedicatedly serving the nation amid the lockdown.

We have also spent generously on giving every precautionary equipment such as gloves, installation of sanitizers all across their facilities and vehicles. Also, we are spending on their safe drives and housing facilities. It is requested to include all such expenses under the eligible spends under our CSR funds, the letter said by FICCI. FICCI also demanded to extend the prevailing PF assistance scheme for the employers with not more than 100 employees (all the companies of the sector). Also, the government is asked to support the employers and the workforce by contributing to the PF for at least the upcoming 6 months.