Please provide me with information on whether there is any Supreme Court judgment (please provide me with the case law details) for deciding the wage component in PF enquiry to be considered as 25% of the bill amount paid to the contractor.
From India, Mumbai
Acknowledge(0)
Amend(0)
34From India, Mumbai
Acknowledge(0)Amend(0)
How can u calculated the pf? Pl. provide the calculation of pf in excel formet. how can u calculate the total information of pf act please give me overall information.
From India, Hyderabad
Acknowledge(0)Amend(0)
From India, Hyderabad
Acknowledge(0)Amend(0)
Sir,
Thank you for the prompt response.
In PF 7A enquiry, the APFC has asked us (we are the principal employer) to withhold 6.4% of the bill amount paid to the contractor until further orders. He has verbally quoted that there is a Supreme Court judgment that in the case of the absence of any wage record, 25% of the total bill paid to the contractor shall be treated as a labor component. Therefore, I am interested in knowing whether there is any Supreme Court judgment. Please provide me the details if any such judgment really exists.
Regards,
Rajendra Bhavsar
From India, Mumbai
Acknowledge(0)Amend(0)
Thank you for the prompt response.
In PF 7A enquiry, the APFC has asked us (we are the principal employer) to withhold 6.4% of the bill amount paid to the contractor until further orders. He has verbally quoted that there is a Supreme Court judgment that in the case of the absence of any wage record, 25% of the total bill paid to the contractor shall be treated as a labor component. Therefore, I am interested in knowing whether there is any Supreme Court judgment. Please provide me the details if any such judgment really exists.
Regards,
Rajendra Bhavsar
From India, Mumbai
Acknowledge(0)Amend(0)
Dear,
On PF, I do not know but on ESI, this judgment is there. Being a principal employer, you are responsible for the same. But what type of contract was it? Whether this work was done on a contract basis inside or outside the premises.
Regards,
J.S. Malik
From India, Delhi
Acknowledge(0)Amend(0)
On PF, I do not know but on ESI, this judgment is there. Being a principal employer, you are responsible for the same. But what type of contract was it? Whether this work was done on a contract basis inside or outside the premises.
Regards,
J.S. Malik
From India, Delhi
Acknowledge(0)Amend(0)
To Mr. J S Malik, Dear Sir, What difference makes to ESI contribution when the contract labour has worked inside or outside the premises of the Principal Employer? Regards Deepankar Shree Gyan
Acknowledge(0)Amend(0)
Acknowledge(0)Amend(0)
This is the fair percentage the RPFC takes in 7A proceedings in the absence of any document submitted by the company to that effect. If anyone wants to challenge it, then supporting documents have to be submitted.
Regards,
rn.pratihari
From India, Bhubaneswar
Acknowledge(0)Amend(0)
Regards,
rn.pratihari
From India, Bhubaneswar
Acknowledge(0)Amend(0)
Dear,
I agree that in the absence of details of material cost and labor cost in a particular bill (of a contractor), it will be construed as 25% as labor charge and the balance is material cost. This is pertaining to ESI alone.
Whereas there is no such system available in PF.
You must understand one big difference between these two acts.
1) ESI is an insurance agency (remember Employees State INSURANCE Corporation) where they do not have to see from whom they are collecting the money. It is collected from you and spent on those who are in need. Therefore, it is payable.
2) To avail of the PF benefits, one has to have the names of the beneficiaries. The contractors employ their casual laborers. They work for two days with him and vanish. He hires other labor again; they work for 10-15 days and go elsewhere (Remember you need to submit Form-2 to enroll them as members; by the time you organize this, they are not there!).
If you deduct PF contribution from the contractor's bill, the amount collected or paid as PF contribution has to necessarily be paid back at a later date to the beneficiary for whom they collected. In our case, it is not possible to keep a record of such employees.
Hence the PF office does not and will not demand PF contribution from such bills.
Hope we are clear now!
V. Balaji
From India, Madras
Acknowledge(0)Amend(0)
I agree that in the absence of details of material cost and labor cost in a particular bill (of a contractor), it will be construed as 25% as labor charge and the balance is material cost. This is pertaining to ESI alone.
Whereas there is no such system available in PF.
You must understand one big difference between these two acts.
1) ESI is an insurance agency (remember Employees State INSURANCE Corporation) where they do not have to see from whom they are collecting the money. It is collected from you and spent on those who are in need. Therefore, it is payable.
2) To avail of the PF benefits, one has to have the names of the beneficiaries. The contractors employ their casual laborers. They work for two days with him and vanish. He hires other labor again; they work for 10-15 days and go elsewhere (Remember you need to submit Form-2 to enroll them as members; by the time you organize this, they are not there!).
If you deduct PF contribution from the contractor's bill, the amount collected or paid as PF contribution has to necessarily be paid back at a later date to the beneficiary for whom they collected. In our case, it is not possible to keep a record of such employees.
Hence the PF office does not and will not demand PF contribution from such bills.
Hope we are clear now!
V. Balaji
From India, Madras
Acknowledge(0)Amend(0)
Mr. Balaji,
I'm not agreeable to your view. PF is applicable to contract labor regardless of the nature of their job. Even if a contract laborer works for two days, PF must be deducted and payable.
Thank you,
Mahesh Pandey
From India, Calcutta
Acknowledge(0)Amend(0)
I'm not agreeable to your view. PF is applicable to contract labor regardless of the nature of their job. Even if a contract laborer works for two days, PF must be deducted and payable.
Thank you,
Mahesh Pandey
From India, Calcutta
Acknowledge(0)Amend(0)
Dear Rajendra,
Principal Employer, when employing contract laborers (through contractors), is required to ensure that the contract laborers deployed for his work are paid minimum wages, and statutory deductions are made and deposited with the respective authorities so that these contract laborers get their due benefits under these two social security acts. Hence, identification of contract labor is all the more necessary for ensuring benefits to them. The principal employer is thus required to keep track of all the benefits arising for those contract employees out of the job entrusted to the contractors employing those contract laborers. Thus, in the absence of any such details available to the statutory bodies for the identification of the labor element, they use a thumb rule of 25% on the invoice value as labor charges, which has been corroborated through different case laws. However, for labor-intensive jobs, this rate may vary in higher proportion.
For any further queries, you may get in touch with me at satyen.chakraborty@gmail.com.
Regards,
Satyen
From India, Calcutta
Acknowledge(0)Amend(0)
Principal Employer, when employing contract laborers (through contractors), is required to ensure that the contract laborers deployed for his work are paid minimum wages, and statutory deductions are made and deposited with the respective authorities so that these contract laborers get their due benefits under these two social security acts. Hence, identification of contract labor is all the more necessary for ensuring benefits to them. The principal employer is thus required to keep track of all the benefits arising for those contract employees out of the job entrusted to the contractors employing those contract laborers. Thus, in the absence of any such details available to the statutory bodies for the identification of the labor element, they use a thumb rule of 25% on the invoice value as labor charges, which has been corroborated through different case laws. However, for labor-intensive jobs, this rate may vary in higher proportion.
For any further queries, you may get in touch with me at satyen.chakraborty@gmail.com.
Regards,
Satyen
From India, Calcutta
Acknowledge(0)Amend(0)
I have the judgment of the Bombay High Court in the ESIC case wherein the court has held that assuming the wages part as 25% of the total bill by the ESI authorities was correct. I am attaching the judgment herewith for the ready reference of all the members.
From India, Mumbai
Acknowledge(0)Amend(0)
From India, Mumbai
Acknowledge(0)Amend(0)
Dear All,
Please let me know in the case of a company that has 16 employees on the payroll and 5 employees on a contractual basis. For the contractual employees, the contractor is paying PF. Is the company liable to be registered under the PF act or not?
Himanshu
From India, New Delhi
Acknowledge(0)Amend(0)
Please let me know in the case of a company that has 16 employees on the payroll and 5 employees on a contractual basis. For the contractual employees, the contractor is paying PF. Is the company liable to be registered under the PF act or not?
Himanshu
From India, New Delhi
Acknowledge(0)Amend(0)
Dear Himanshu ji,
My answer to your query is - YES.
Since your establishment/organization has 20 or more employees, including contractors' employees, the provisions of the EPF & MP Act 1952 apply to your establishment/organization. Therefore, you are liable to obtain registration under this Act.
Even if all your employees fall under the category of 'excluded employees' as per the EPF & MP Act 1952, you are still required to obtain registration under the Act and pay Rs. 7/- in A/c 2 and A/c 22 every month.
From India, Mumbai
Acknowledge(0)Amend(0)
My answer to your query is - YES.
Since your establishment/organization has 20 or more employees, including contractors' employees, the provisions of the EPF & MP Act 1952 apply to your establishment/organization. Therefore, you are liable to obtain registration under this Act.
Even if all your employees fall under the category of 'excluded employees' as per the EPF & MP Act 1952, you are still required to obtain registration under the Act and pay Rs. 7/- in A/c 2 and A/c 22 every month.
From India, Mumbai
Acknowledge(0)Amend(0)Join Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.
Supreme court judgment on bifurcation of PF.pdf
Khushboo vs Kanniammal - Supreme Court Judgment - A Perspective.doc