GST, Compliance Gaps, Formalisation Paradoxes, and Policy Pathways in India’s Gig Economy

India’s GST framework and its growing gig economy are not a good fit, and gig workers are bearing the cost of that mismatch. A tax system built for organised, stable businesses is being applied to a workforce that is dispersed, irregular, and legally ambiguous. The result is a set of compliance burdens that are confusing to navigate, expensive to meet, and regressive in their impact. This review has traced the main fault lines: a registration threshold that keeps millions of gig workers in permanent legal uncertainty, an ITC framework that denies workers access to legitimate cost relief, platforms that classify workers as contractors but leave them to face the tax system entirely alone, and compliance costs that fall hardest on those who can least afford them. These are not minor administrative glitches. They reflect a fundamental mismatch between how GST was designed and how gig work actually operates. What is needed is a set of targeted, practical reforms: simplify the compliance process for gig workers, extend the reverse-charge mechanism to more service categories, require platforms to provide tax documentation, and link registration to real social protection benefits. None of this requires building entirely new systems. It means updating existing ones to reflect the reality of twenty-first century work. For Telangana, the opportunity is especially significant. The state has the technology infrastructure, the concentration of platform workers, and the policy capacity to lead on this issue. What it needs is the research evidence to guide reform design. The intersection of GST and gig work is not a narrow academic concern. For millions of workers who depend on platform income to sustain their families, it is a matter of daily economic survival.

De Stefano, V. (2016). The rise of the “just-in-time workforce”: On-demand work, crowdwork and labour protection in the “gig-economy.” International Labour Office. https://doi.org/10.2139/ssrn.2682602 Fairwork. (2022). Fairwork India ratings 2022: Labour standards in the platform economy. Oxford Internet Institute, University of Oxford. https://fair.work/en/fw/publications/fairwork-india-ratings-2022-labour-standards-in-the-platform-economy/ Ghosh, S. (2022). Formalising the informal through GST: Evidence from a survey of MSMEs. Review of Development and Change, 27(2), 150–169. https://doi.org/10.1177/09722661221130138 Graham, M., Hjorth, I., & Lehdonvirta, V. (2017). Digital labour and development: Impacts of global digital labour platforms and the gig economy on worker livelihoods. Transfer: European Review of Labour and Research, 23(2), 135–162. https://doi.org/10.1177/1024258916687250 International Labour Organization. (2018). Digital labour platforms and the future of work: Towards decent work in the online world. ILO Publishing. https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/documents/publication/wcms_645337.pdf International Labour Organization. (2021). World employment and social outlook 2021: The role of digital labour platforms in transforming the world of work. ILO Publishing. https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/documents/publication/wcms_771749.pdf Kalleberg, A. L. (2009). Precarious work, insecure workers: Employment relations in transition. American Sociological Review, 74(1), 1–22. https://doi.org/10.1177/000312240907400101 Katz, L. F., & Krueger, A. B. (2019). Understanding trends in alternative work arrangements in the United States. RSF: The Russell Sage Foundation Journal of the Social Sciences, 5(5), 132–146. https://doi.org/10.7758/RSF.2019.5.5.07 NITI Aayog. (2022). India’s booming gig and platform economy: Perspectives and recommendations on the future of work. Government of India. https://www.niti.gov.in/sites/default/files/2022-06/25th_June_Final_Report_27062022.pdf