The government and private sector have agreed that permanent account number (PAN) card is not mandatory for commercial enterprises when making payments to employees who work on a daily wage basis and earn up to Rs 2,000 per day.
However, employees receiving regular salaries must acquire PAN cards. The government had introduced a mandatory provision requiring payments of more than Rs 1,000 or above through PAN.
The move was criticized by the private sector stating that the provision was introduced without conducting sufficient groundwork. The private sector had suggested that the government has to be flexible for a certain period and raise the minimum threshold for the PAN provision.
The private sector argued that it was impossible to implement the PAN provision in the construction sector and industries since they employ thousands of Indians and unskilled workers for whom it is impossible to obtain the PAN number.
The private sector demanded that the minimum threshold for PAN should be raised to Rs 7,000 but was not met. The government had introduced both the PAN and VCTS provisions from the beginning of the current fiscal year. However, the private sector had refused to implement the system and has demanded the government to review its decision.