Kolkata High Court Ruling: When Exactly Should EPF Contributions Be Paid?

Kolkata High Court Judgment on EPF Contribution Due Date

The Kolkata High Court, in its judgment dated May 28, 2001, in the case of Kanoi Paper & Industries Ltd. vs Asstt. Cit, has decided that the due date for the payment of EPF contribution is 15 days from the end of the month in which the salary is paid to the employees, not 15 days from the end of the month in which the wage was due.

For example, if the salary for March 2012 is paid on April 4, 2012, then the due date for filing the contribution is not April 15, but it is May 15.

Relevant Portion of the Judgment

The relevant portion of the judgment (attached in PDF) is pasted below:

"Clause 38 of the Employees' Provident Fund Scheme, 1952, fixes the time limit for making payment in respect of contribution to the provident fund to be 15 days from the close of the month concerned. However, the issue here is whether the 'month' should be considered to be the month to which the wages relate or the month in which the actual disbursement of the wages is made. We are of the considered opinion that the expression 'month' should mean here the month during which the wages/salary are actually disbursed irrespective of the month to which the same relates. If for some reason the payment of salary for a particular month is held up for a considerable period of time, it cannot be said that the employer would be liable to make payments in respect of the 'employer's' as well as 'employees'' contribution in respect of wages for such a period within 15 days from the close of the month to which the wages relate. On the other hand, in our view, the most appropriate interpretation would be that the employer would be at liberty to make payment of the contribution concerned within 15 days (subject, however, to the further grace period) from the end of the month during which the disbursement of the salary is actually made, and the contributions to the provident fund are thus generated, inasmuch as the provision relating to the disallowance of such contributions on account of delay is rather an artificial provision.

Thank you for sharing your valuable insights. However, I have one doubt regarding the judgment of May 2001: have there been any changes or notifications made under the PF Act since then? It is a common practice of our government that if any judgment goes against them, they tend to make changes in the act. Therefore, it is necessary to confirm whether this stance is still in existence and applicable.

Regards,
Pramod Thakar

Thank you for your valuable information. However, PF authorities are mentioning that if the March 2012 salary is paid on April 4, 2012, then the due date of the EPF Contribution will be April 15, 2012, and not May 15, 2012. This has been confirmed with the PF office in Pune. Hence, once again, confirm with the PF authorities.

Good job on exercising judgment. I believe that it will not be used as per the EPF Act. The due month is the salary paid month, i.e., if we are issuing the salary for March 2012 in April 2012, then the Challan Payment last date is 15.04.2012 as per the EPF Act.

Regards,
Arihant

Understanding Penalties for Default in PF Contributions

Hi Arihant, about your query and according to PF CHAPTER V, PARA 32 A on page 45, if an employer defaults in the payment of any contribution, they may be penalized. The penalties are as follows:

- Period of default and rate of damages (% of arrears per annum):
- Less than two months: 17%
- Two months and above but less than four months: 22%
- Four months and above but less than six months: 27%
- Six months and above: 37%

According to this rate, we cannot submit before or in advance. If the concerned department sends a notice to submit, then we can reply and submit. Also, please go through the attachment.

HAVE A NICE DAY

Regards