Explore the expectations of the co-working industry from Budget 2024, including hopes for reduced GST, input tax credits, and incentives for green practices. Leaders anticipate measures to enhance the industry’s reach and sustainability.
Empowering Co-working: Anticipating Budget 2024 Reforms
Flexibility in Taxation and Green Initiatives
As the eagerly awaited Budget 2024 looms, co-working industry leaders are hopeful for favorable measures that could bolster their sector. Key expectations include a reduced Goods and Services Tax (GST) rate for small-scale co-working clients and the ability for co-working firms to claim input credit on work contracts and construction services. These changes aim to attract small start-ups, expand the industry’s footprint, and reduce overall costs for companies leasing space.
Lower GST and Input Tax Credit: Boosting Co-working Dynamics
Lower GST for Small-Scale Co-working Clients
Manas Mehrotra, Founder of 315Work Avenue, emphasizes the need for a lower GST rate for small-scale co-working clients. This adjustment could significantly enhance the industry’s reach, attracting burgeoning start-ups and contributing to increased revenue.
Input Tax Credit on Work Contracts
Budget 2024 is awaited with anticipation for provisions allowing co-working firms to claim input credit on work contracts and construction services. This move is expected to benefit companies leasing out spaces, potentially reducing their overall operational costs.
Stamp Duty Concessions
Considering the traditionally high stamp and registration duties, there’s a call for concessions or alternative measures. This could involve a reduction in stamp duty rates or allowing twice the duty paid as expenditure under income tax. Such steps would encourage even small agreements to be registered.
Recognition as a Separate Vertical: Special Economic Zones (SEZs) Inclusion
Neetish Sarda, co-founder of Smartworks, advocates for the recognition of co-working firms as a distinct vertical. Budget 2024 could pave the way for flexible workspace companies to establish commercial spaces within special economic zones (SEZs). This inclusion would align co-working with real estate builders, opening avenues for sustainability initiatives and the deployment of renewable energy.
Tax Incentives for Infrastructure Improvements
Siddharth Verma, Head of BuzzWorks by Brigade Group, urges Budget 2024 to introduce tax incentives directed at infrastructure improvements. This includes investments in smart technology and modern amenities, with additional benefits for co-working spaces embracing energy-efficient practices such as renewable energy resources, and efficient HVAC and lighting systems.
GST Reduction for Co-working Spaces
Addressing Goods and Services Tax (GST) concerns, industry experts propose a temporary reduction from the current 18%. This adjustment aligns with the evolving trend toward flexible working styles, fostering greater adoption of co-working spaces and making them more affordable.
Market Dynamics and Projections
A recent JLL report indicates the continued dominance of flexible leasing in 2023, with around 145,000 seats expected to be leased, surpassing the previous peak in 2022. Anticipations for 2024 suggest a further rise, reaching over 150,000 leased seats. The demand for flexible and managed enterprise services remains robust, showcasing the industry’s resilience.
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