The Indian Staffing Federation (ISF) has formally urged the Finance Ministry to bring GST on employment services down from the current 18% to 5% . The ISF argues that a rate cut could significantly boost formal job creation—potentially growing the workforce by 15–20 million over the next few years—by reducing the perception of staffing services being merely an “additional cost”

Representing over 1.8 million contract workers across 137 member staffing companies, the ISF highlighted that employment services currently contribute a mere 0.15% to total GST revenue—making the potential revenue loss from a rate cut negligible while enabling greater formalisation, social security coverage, and entry into the tax net.

This proposal is slated to be discussed at the 56th GST Council meeting, expected later this month—marking the Council’s first session since December 2024.

sources