Staffing industry seeks resolution of tax woes in Budget

Wants TDS cut from 10% to 2%, and applied on commission earned, not on gross invoice value

Wants TDS to be cut from 10% to 2%, and applied on commission earned, not on gross invoice value

The staffing industry, representing companies such as Team Lease and Quess, wants finance minister Arun Jaitley to resolve the tax anomalies it faces, in the upcoming Budget 2017 India.

The Indian Staffing Federation says that its demand assumes significance since post-demonetisation it is the formal sector which will grow and the staffing industry will play a crucial role in that.

The industry represents contract hiring in organised industry done through tri-partite agreements — between the company that is hiring, the person hired and the staffing industry.

The Federation said tax deducted at source (TDS) is imposed on the gross invoices received by its members from its client companies, whereas it should be on just the commission received by the staffing companies.

While this amount is adjusted later, it takes about a year to happen, creating cash flow problems for staffing companies, says Suchita Dutta, executive director of the Federation.

At the same time, the Federation said its members topped the list of India staffing firms, as per the recent report published by Staffing IndustrAnalysts. The report indicated that the Indian staffing industry was estimated to be worth Rs 27,000 crore in 2015 and is forecast to grow by 12 per cent in 2016 and 10 per cent in 2017.

When asked when there is cash flow problems, how come the industry is performing so well, Dutta said the results are based on top lines and not bottom lines. Read more


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