Karnataka Imposes Cess On Aggregator Platform Transactions To Support Gig Workers

New Delhi: The Karnataka government has recently introduced a new cess on transactions made through aggregator platforms like Zomato, Swiggy, Ola, Uber, and similar services. This move aims to create a social security fund for gig workers, ensuring better financial protection and welfare for those working in the gig economy.

During a press conference, Karnataka Labour Minister Santosh Lad stated, “The Labour Department of Karnataka has decided to impose cess on every transaction on aggregator platforms like Zomato, Dunzo, Swiggy, Zepto, Ola and others such.”

He further added “The money that will be collected will be used for the welfare fund for gig workers. We are not charging for products or goods that consumers purchase; they will be charged only on transport,”.

The state government has already drafted a bill to protect the rights of platform-based gig workers. In the draft, the state government says that the bill intends “to place obligations on the aggregators in relation to social security, occupational health and safety, and transparency.”

It provides a scope to establish a welfare board and create a welfare fund for the platform-based gig workers in the state. By definition, a gig worker is someone who works short-term or project-based jobs, often as an independent contractor or freelancer, instead of being employed by a single company.

Gig workers are part of the gig economy and are often involved in the service sector. As of now, gig work, being a relatively new form of workforce, has no dedicated labour laws. However, some provisions of Indian labour law cover some parts of the gig work space.

The Employment Compensation Act, 1923, mandates that the employer pay compensation for accidents arising out of and in the course of employment. The applicability of this law to gig workers also remains to be determined by courts.

Cess is a tax, generally, one levied for promoting services like health and education among others. Governments often charge a cess for the purpose of development in social sectors. (With ANI Inputs)