[Update] Karnataka To Impose 1-2% Transaction Fee On Platforms Like Zomato, Uber

Update | October 19, 12:15 AM

Karnataka Labour Minister Santosh Lad said confirmed that the state government will impose a cess on online aggregator platforms for every single transaction. 

As per news agency ANI, he did not disclose the quantum of the levy but said that the funds collected from the charges will be used for the welfare fund of gig workers. 

“The labour department of Karnataka has decided to impose cess on every transaction on aggregators platforms like Zomato, Dunzo, Swiggy, Zepto, Ola and others such. The money which will be collected will be used for the welfare fund for gig workers. We are not charging for products or goods which consumers purchase, it will be charged only on transport,” Lad said. 

Original | October 18, 5:31 PM

The Karnataka government is reportedly planning to levy a 1-2% fee on each transaction made through aggregator platforms like Zomato, Swiggy, Flipkart, Amazon, Ola, Uber, Urban Company (UC), among others.

The funds collected from this fee will be used to provide social security measures for gig workers, Moneycontrol reported.

The amount collected from the transaction fee will go to a welfare board, the report said, citing an official.

The proposal is part of the state government’s plans to provide social security to gig workers. Earlier this year, the government unveiled the draft Platform-Based Gig Workers (Social Security and Welfare) Bill, 2024. 

This move follows a broader trend in India wherein several states are framing rules to provide social security net for the delivery executives of the aggregator platforms. 

It is pertinent to note that as of now Rajasthan is the only state to have enacted legislation to protect the rights of gig workers. The Rajasthan government’s Act also mandates formation of a welfare board for gig workers, apart from setting a separate welfare fund. 

As per Karanatak’s draft bill for gig workers, a transaction and management system will also be built to track the payments made to gig workers and associated welfare fee deductions. 

Notably, the deadline for submitting objections and suggestions for the draft bill ended on July 10. The bill was initially to be presented during the Monsoon Session, but it was postponed due to requests from aggregators and industry bodies. 

The report added that the state cabinet is likely to discuss the Bill on October 24. 

Citing labour department officials, the report said that the department conducted as many as 32 rounds of meetings with various stakeholders, including 26 aggregators, gig workers’ unions, civil society groups, and legal experts. 

Besides, it also held discussions with the department of technology and biotechnology, and organisations like NASSCOM, and CII. 

It is pertinent to note that the Internet and Mobile Association of India (IAMAI) expressed apprehensions around certain provisions of the draft bill and said they could adversely affect the ease of doing business. 

Earlier this year, the Karnataka assembly also passed a bill that proposes imposing a cess of up to 2% on OTT subscription plans.

Meanwhile, the Centre is said to be working on a framework to provide social security for gig workers. It is slated to be rolled out early next year.

(This story has been updated to include Karnataka Labour Minister’s statement).