PF & ESI Exemption - For Employees - chartered accountant
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PF & ESI Exemption - For Employees

vadiraj Started The Discussion:

Dear All, We have engaged a service provider (a Chartered Accountant) for audit activities. The agreement is between our company & the M/s. XYZ & Co., (chartered accountant's firm). The chartered accountant has hired 2 employees from a different company (third party) & has made them operate from our premises for audit activities. The chartered accountant claims that those 2 employees are exempted from PF & ESI since their salary is more than Rs. 10,000/- & hence he is not deducting PF & ESI for these 2 employees. Request clarification for the following points : 1. what is the criteria for ESI & PF exemption (Conditions) 2. If exempted, as claimed by the chartered accountant, what documents can we ask him to submit from HR Statutory compliance viewpoint? 3. We are in no connection with the third party from whom the CA has hired those 2 employees, but the CA is submitting the copies of the third party (PF & ESI challans, Attendance register, wage register). What needs to be done in this regard. Kindly request you to provide details w.r.t. the above issue in detail. Thanks & Regards, Vadiraj Kulkarni

Madhu.T.K - Senior Member
Chartered Accountants attending auditing work are not employees of the establishment. The amount paid to Chartered Accountants is not by way of salary but professional charges/ fee. Therefore, ESI and EPF are not required to be deducted from the remuneration paid to Chartered Accountants. I shall be glad if others could also share their knowledge in this respect. Regards, Madhu.T.K

vadiraj - Contributing Member
We are going ahead with TDS for Chartered Accountant... but my query is regarding those 2 employees hired by this CA & deployed in our premises for our activities. There is no confusion w.r.t. CA's TDS.... Request clarification... Regards, Vadiraj Kulkarni

saurav123 - 
Madhu is right Vadiraj.... As they are not the employees of the firm, 1) They are exempted from PF. 2) As their Salary is more than 10,000 which is maximum limit for ESI, they are exempted from ESI also. THey may be getting Medical Allowances in their CTC. 3) They May be not be exempted from PF if they are on the roll of the company. Regards Saurav

gaurir - Contributing Member
Dear seniors
We are having contract with a CS and their people our working at our premises These people are having appointment letter issued by the CS and their salary is below 15000. our CS claims that up to 10 employees he is not required to pay PF /ESIC . is that correct ?


essykkr - Contributing Member
Quote:
Originally Posted by gaurir View Post
Dear seniors
We are having contract with a CS and their people our working at our premises These people are having appointment letter issued by the CS and their salary is below 15000. our CS claims that up to 10 employees he is not required to pay PF /ESIC . is that correct ?

From CS point of view he did not require to take PF/ESI Code being having less than 10 employees.
But from your companies prospective they are working in your establishment, and are contractual employees, you need to submit ESI/PF in your own code.

though otherwise, already pointed out CA/CS are indepedent professionals and they are providing you professional services on retaining bases, from your organization point of view only service tax is payable not PF/ESI.

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