Chairman of Pension Fund Regulatory and Development Authority (PFRDA) Hemant Contractor said that many small businesses which are registered under GST (Goods and Services Tax) have attracted the working people which do not have any retirement savings plans to pensions.
Goods and Services Tax (GST) has bought the business which had annual sales of Rs 20 lakh and above into the indirect tax net and even the small and informally operating businesses which did not have social security plans and tax registration, GST made them the part of the formal economy by making them registered taxpayers.
According to the Economic Survey of FY 17-18, the taxpayers have gone up to 3.4 million due to the help of Goods and Services Tax (GST).
The National pension system a self-contributory pension scheme may have got the largest fundraising through this additional employee base.
GST has mentioned one of the main reason for major challenges in getting the small businesses to join NPS is the problem in maintaining the accounts. In an interview, he said “With more firms getting registered under GST, small firms operating in the informal sector are becoming part of the formal sector. To that extent, their bookkeeping and maintenance of accounts will improve. It will be possible for them to join NPS and have their contribution deducted from the salaries”. NPS has 780,000 subscribers i.e. 5,162 companies as contributors and every month, around 8,000-12,000 new corporate subscribers are added by NPS.
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To register the firms with workers who earn more than Rs 15,000 per month and the small businesses which represent the working people who do not have any retirement savings plan, the PFRDA has taken steps. Factories which have 20 or more workers and the workers who get salary up to Rs 15,000 per month have to compulsorily register for the provident fund scheme which is run by the EPFO (Employees’ Provident Fund Organisation) and those who are earning more than Rs 15,000, then NPS is an optional retirement saving.
While the pension regulator will also discuss the superannuation of funds under the corporate entities and how it could be the part of NPS.
In 2017, the government explained that these type of transfers will not engage any tax.
Source: Livemint.com
