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Demonetization & GST Cascading effect on the Cleaning Business

‘Lift Customs on cleaning material’

“Demonetization has not had much impact to the cleaning industry at large, since most of the companies have streamlined their payment process through online banking transactions. Overall demonetization will be advantages to cleaning industry to standardize the pricing pattern through its transparent process.

Post demonetization, we have not experienced any hurdles in operations since the team is following the standards and financial measures in all our dealings. In general, overall in the Industry too, there are no specific complaints on major issues. Most of the structured / reputed organizations are strictly adhering to the industry practices to maintain their service standards.

I strongly believe that the companies strictly following employee / employer statutory employment norms would not have experienced any long-term impact on contract labour issues. However, since majority of labours are poor or developing sections of the economy, the recent minimum balance restrictions planned by certain banks may make it tough for them to withdraw their earnings in full. It is suggested that at least the salary account holders should be strictly excluded from the minimum balance rule.

As far as GST is concerned, it will have a major cost impact in the industry, if the tax is raised above the current service tax percentage. Since major cost of such industry liaise with labour, which attracts service tax while billing. However, if GST is maintained at higher rate, the cost for the service provision also will increase which may force the client to downsize the manpower requirement to control the cost. Apart from the labour, considering the import of specific cleaning chemicals, tools and machineries, the cost of the cleaning will increase significantly with addition of GST over and above to the import custom duty. As we are steering towards infection free and environment friendly implementation across India, it will be sensible, if the decision-making authorities seriously think over it to lift the import of customs duty for cleaning materials. This will ensure that the financial load is unnecessarily not added to the client where it will be difficulty for them to decide and maintain such services as expected.

ervices in the cleaning industry is by implementing advanced technology-driven tools and machineries; thus, optimizing manpower requirement to maintain the service standards consistency and quality all through in a cost-effective manner.”

M.K. Padmanabhan,
Chief Executive Officer, Faber Sindoori Management Services Pvt. Ltd

‘Will create a transparent system’

“Well, demonetisation had an initial adverse effect on some of the few small contract cleaners who are basically dependent on cash disbursals. However, things have more or less settled down and every company is gearing up to have implemented proper processes and accounted transactions. This will also help the labour class, who have, all this while been deprived of ESI and PF facilities since they were on cash payments.

While demonetisation has brought out black money from the coffers, what needs to be done is cleaning up of Government bodies as well, as far as corruption is concerned. Once that is achieved, every industry segment, including cleaning industry, will benefit from a transparent system.

On the other hand, GST implementation which will surely eliminate the various requirements of Octroi, road permits, way bills, etc., which is a nightmare at present. One tax and NO COLLECTION of C-forms is one thing we are looking forward to. We need to watch what is the percentage of GST will be applied to our industry.

Meanwhile, import duty for sure must be removed on cleaning products since these products should be made available at much affordable price for customers, more so because our country needs a lot of cleaning.”

Vivek Mata, MD, Charnock Equipments
Pvt. Ltd and Charnock Cleaning Academy

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