Last Tuesday, IAMAI Industry Body (1) requested the government to suspend the TDS and EPF of small and medium enterprises that are part of the service sector for 06 months. They urged the same, so these organizations can hold their employees while providing cash salaries to their employees without any deduction.
Why is the Internet and Mobile Association of India urging the movement?
As noted by the Internet and Mobile Association of India (or IAMAI), SMEs hold vast employers of India with at least 50 to 1000 employees per employer, which drives the service sector. In their release, it also says that laborers are abundant in the developing nation India, but the capital is scarce. Here, SMEs contribute a lot with employing millions of people.
Further, due to the current health crisis and COVID-19 lockdown, many companies are resorting to cutting the salaries of their employees, which may have a more massive impact. Thus, IAMAI intimates that if we postpone the TDS, EPF, and ESIC for at least six months, we could alleviate the same.
How will the move impact the sector?
The service sector is currently managing its workforce and employees despite its lack of continous revenue long with future uncertainty, according to the industry body. Further, it stated that such steps would reduce the burden on these enterprises while taking care of the employee’s urgent requirement for cash. The government can resume the deduction once the regular and consistent cash flow is resumed.
The industry body further please to keep the payrolls of its employees during this uncertain period, which the industry is appreciating well. We need to ensure that we release the pending dues as it is a critical requirement to keep the business afloat without laying off any workforce. Hence, it is also appealing to the authorities to complete the tax return of various corporates swiftly.
IAMAI additionally requested the government to modify the laws and other acts to reduce the costs along with minimum outflows in terms of employee cost as this would help employees to get a higher inflow of funds to sustain this pandemic.