Karnataka announces cess on transactions conducted through aggregator platforms to support gig workers

NEW DELHI: Karnataka government has decided to impose a new cess on transactions via aggregator platforms like Zomato, Swiggy, Ola, and Uber. This move aims to fund social security for gig workers in the state.
Karnataka labour minister Santosh Lad said, "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 clarified that the cess will apply to transportation services, not to the purchase of products or goods.
The government is drafting 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.