Co-working Firms Urge Budget 2024 to Include ITC and Green Credits
Flexible office space providers are anticipating favorable measures in Budget 2024, set to be presented by Finance Minister Nirmala Sitharaman on February 1. As an Interim Budget or a Vote on Account preceding the Lok Sabha elections, co-working companies are hoping for benefits such as a reduced goods and services tax (GST), the ability to claim input credit on work contracts and construction services, and incentives for adopting energy-efficient practices. Manas Mehrotra, Founder of 315Work Avenue, emphasizes the importance of a lower GST rate for small-scale co-working clients, which could encourage the participation of small start-ups in the industry and contribute to increased revenue.
"We anticipate that Budget 2024 will empower co-working enterprises to claim input credit for work contract and construction services, benefiting companies leasing space and reducing their overall expenses", he stated. Stamp and registration duties are typically high, and as both landlord and client agreements are subject to these charges, the Budget could explore options like a concession in stamp duty rates or allowing twice the duty paid as expenditure under income tax, he elaborated. This move aims to encourage the registration of even small agreements. Another crucial requirement for the co-working industry is a lower or concessional rate of TDS to enhance working capital. Additionally, an extended tax holiday for start-ups could be announced in Budget 2024, fostering business scaling and increased investment, he added.
Neetish Sarda, Co-Founder of Smartworks, emphasized the need for co-working firms to be acknowledged as a distinct vertical. Budget 2024 should enable flexible workspace companies to operate in commercial spaces within special economic zones (SEZs). Sarda highlighted the potential for sustainability initiatives within the sector, advocating for the introduction of renewable energy options and the ability to purchase green credits at scale in commercial buildings.