Canteen Allowance Is Part Of Basic Wages And PF Is To Be Deducted Therefrom - Delhi High Court

Dear friends,
Delhi High Court in its order dated 22.7.2013 (copy attached) in the case of Whirlpool of India Ltd vs RPFC has held that Canteen Allowance is part of basic wages and PF is to be deducted therefrom.
Thanks

Dear Sh. Agarwal,
Greetings for the day,
Agreed with this nice updation, as earlier the component consider for deduction of EPF is Basic+da+food conc.(if any) ,it seems that after withdrawing canteen subsidy the pay payment against the same was treatd as food conc. so the liablity of EPF exist.
Thanks & Regards,
From,
Sumit Kumar Saxena

Thank you very much for the updation. i would draw attention on Meal coupon and Meal cards, that are now used by many companies as a part of my basket allowance(MBA) in CTC. this cost of meal card does not attract any concession or subsidy even if it is used in canteens it is treated as like any purchase in hotel and malls food courts. Recently, it has come to my notice that pf inspector are looking from subsidy angle. How come now some PF inspectors are looking at purchases done with meal card or meal coupon vendors. can some experts discuss on this.

In respect of meals coupon (Sodexo etc) neither employer nor employee get any concession. In fact the employer has to incur service charges which is also a cost to company which is normally not put as part of CTC. Meals coupon, therefore, is at par with cash which can be exchanged at various retail outlets. The only benefit available to the employees is the income tax benefit. Since it is a benefit other than salaries and allowances, it will not attract PF contribution. Certainly, once the PF come out with a new definition to salary with a wider meaning to it covering all allowances ass per terms of contract of employment, then, of course, the same will also come within its meaning. Till then, meals coupon is to be taken as excluded from PF contribution.

The Court verdict has relevance because even in the past there is a practice that whatever is arrived at on a wage settlement which normally binds on all employees will be treated as part of salary. The issues pertaining to special allowance (other than DA) which is paid to all employees either as part of settlement or practice followed by the company is also part of salary for the purpose of PF

Madhu.T.K

Dear Mr. Madhu ji,
Certainly the SODEXO MEAL COUPON is part of contribution as per the Sec.2(b)(i) says that "the cash value of any food concession" , Since most of the people are using this coupons are using at various food stalls including Spencer, More outlets and Reliance departmental stores etc., The PF authorities may incest to cover it. - Please give your valuable suggestion.
Regards,
PBS KUMAR

I am not convinced because meals coupon is not some thing that is given as substitute for food. If you go in detail, we can also see that Sodexo being given to employees as part of tax saving benefit, is given to those employees who come under tax brackets and for them the PF qualifying salary (Basic+DA) itself would be over Rs 6500 and in such circumstance how can PF say that these allowances would attract PF? In my understanding most of the state's minimum wages have crossed Rs 6500 and unless this limit is increased there would be no meaning in demanding contribution on these allowances since PF Organisation cannot demand contribution on a salary above Rs 6500. It was clarified in Maratwada Gramin Bank's case that Pf cannot be demanded on salaries above Rs 6500.
Regards,
Madhu.T.K

Hi, All
The Very Very useful attachment contained information clearing the doubts.
Thnkx all perticularly Madhu T.K. Sir, for subsequent clarity.
Regards
Naresh