saudamini-kumar
If an organisation is engaging for 3-4 yrs on full time exclusive contract basis and give monthly remuneration, marks office attendance, accords leaves, does appraisals, gives life insurance, accident insurance etc.. What are the common policies to be applied w.r.t. statutory or related retirement benefits applicable - are they entitled to PF etc? Also if GST is applicable - why? Or why not? Iím asking for contractual engagements in general stating from minimum wages to even those above 20L.pa.
From India, Noida
PROFESSIONALS AND BUSINESSES PARTICIPATING IN DISCUSSION
Madhu.T.K
Industrial Relations And Labour Laws
Saswatabanerjee
Partner - Risk Management

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Madhu.T.K
3735

They are not service providers or consultants but are employees on fixed term contract. The remuneration payable to them is called salary and it will not attract GST.
If they were members of EPF in their earlier organisation, they should be given EPF also even if their salary is Rs 20 lakhs per month. If their service extends beyond 5 years, gratuity should also be paid to them on their leaving your organisation

From India, Kannur
saudamini-kumar
Thank you for the insight, however however the Finance dept. insists on applying GST rule on 20 lac plus contractual engagees and have been booking their TDS under section 194J and issuing Form16(a) instead. How can this be argued so that the Management understands it
From India, Noida
Madhu.T.K
3735

They are employees and their remuneration should be booked under section 192 and not under 194. You may please show the attached judgement which is self explanatory.
From India, Kannur

Attached Files (Download Requires Membership)
File Type: pdf Salary vs Professional Income-IT matters- Wockhardt Hospitaldocx.PDF (260.5 KB, 18 views)

saudamini-kumar
Thank you for the document this is really helpful - I have passed it on to my seniors, hoping there will be no more counter arguments, will keep this thread open to update further.
From India, Noida
saswatabanerjee
2289

If the person in question is on contract and your company is deducting TDS under sec 194C, and the employee is not objected to it, meaning they are accepting they are contract employees, then their service will come under GST and they will need to register and pay GST on their invoices.

It also means that accounts can not pay them without a formal invoice. They are right in insisting on GST, as it will strengthen their position in case there is an investigation by income tax or GST department.

From India, Mumbai
Madhu.T.K
3735

The employer knowingly offers such terms and the employee unknowingly accepts it. That does not mean that whatever agreed is maintainable in law. If there is anything against the law, the contract will become void. In this case, the contract is void since there exists employee- employer relationship. The employer is trying to deny the benefits under various Labour Acts including gratuity. That should not be allowed.
From India, Kannur

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