New Delhi, February 01, 2019: “Co-working industry is currently fueling the growth of startups and small businesses, and is definitely in sync with the government’s vision of Startup India. We have also seen several initiatives from the government including Atal Innovation Mission (AIM) and Self-Employment and Talent Utilization (SETU) to promote the culture of innovation and entrepreneurship. Similarly, I feel that a lot more alignment can come in from the government including the provision of incentives and support to the co-working players who cater to the startup segment. It is time we expect some specific schemes to the co-working segment as well, similar in fashion to what we saw with the STPI scheme in the early 90s.
The governments initiative of bring in GST has been beneficial for the sector as co-working is a service business and a substantial amount of money is spent on the interiors, and GST has simplified the taxation process to a different level. Having said that enabling the co- working players to claim Input Tax credit on work contract and construction supplies would curb the outflow of cash to a very large extent. This in turn will significantly aid the growth of the co- working business wherein, the input tax credit if extended to the developers is also passed on to co-working players who lease out space, will reduce the overall cost.
However, the current co-working industry is being affected by TDS. The tax is being doubly levied as it is deducted from the co-working player when the property is leased from builders as well as when it is given in rent to the clients. So, it becomes important to support the players and leverage the co-working sector by bringing down the TDS, considering that co-working is a business where the operator is not owning the property. I believe, here the tax should be applicable only on the value addition and not on the entire property.”
Corporate Comm India(CCI Newswire)
