Is PF or ESI Deduction Needed for Monthly Catering Payments in Organizations?

Can anyone tell me that in an organization, if there is a catering supply (i.e., food coming from a restaurant (outside) to the organization) to the employees on a daily basis, and for the same, the caterer is paid on a monthly basis. I would like to know whether for that payment we have to deduct PF or ESI. Please advise. Regards, Rajesh

Hi Richar,

If your organization falls under ESI and you have a registered code number of ESI, then you have to deduct ESI from the payment you are making to the caterer, as he is none other than a contractor supplying food to your employees; hence, he is also involved with the business of the organization.

Mohan Rao
Manager, HR

Hi,

I hope I am not too late to inform you that PF and ESI both are not applicable in the above case. TDS will be deducted from the total amount payable to the vendor, caterer, or contractor. He does not fall under the category of "Employee."

Regards,
Taru

Why do you pay ESI and EPF for any payment made to a supplier? You purchase food from a restaurant, and in return, the restaurant raises a bill. Then there is no question of any ESI or PF deduction. But at the same time, if the restaurant is run exclusively for you and your employees, then the relationship between you and the restaurant people will change from purchaser and vendor to principal employer and contractor. If so, you will have to deduct ESI and PF from any consideration flowing from you to the contractor.

Regards,

Madhu.T.K