40 SEBI & CORPORATE LAWS - MAGAZINE[Vol. 154
2.2-1Circulars, Notifications & RTI Response issued by the Regulatory Body EPFO
For
ready
reference,
the
important
and
significant
circulars
and
notifications
issued^
by
the
Regulatory
Body
CPFC
concerning
the
issue
of
interpretation
of
basic^
wages
u/s.
2 (
b)
of
EPF
&
MP
Act,
1952 ,
for
the
purpose
of
determination
of^
provident
fund
contribution
u/s.
6
of
the
Act,
having
a
direct
bearing
on
the^
subject
matter
under
consideration
are
discussed
here,
as
under:2.2-1-1
OFFICIAL
RESPONSE
OF
EPFO- HEAD
OFFICE,
MINISTRY
OF
LABOUR^
&
EMPLOYMENT,
GOVT.
OF
INDIA,
NEW
DELHI,
BEARING
F.NO.
C.IV/ 1 ( 63 ) 10 /RTI/ 948 ,^
IN
OCTOBER
2010 ,
IN
RESPONSE
TO
ONE
RTI
In
its^
official
response
to
one
RTI,
the
EPFO
Head
Office,
Ministry
of
Labour
&
Employment,^
Govt.
of
India,
New
Delhi,
bearing
F.No.
C.IV/ 1 ( 63 ) 10 /RTI/ 948 ,
in
October^
2010 ,
has
categorically
clarified
that
the
under
mentioned
allowances
are^
outside
the
purview
of
‘basic
wages’
u/s.
2 (
b
)
of
the
Act,
and,
as
such,
don’t
attract^
payment
of
PF
contribution,
viz.,
(
a)
House-Rent
Allowance;
(
b)Education
Allowance;
(
c)
Conveyance
Allowance;
(
d)
Washing
Allowance;
(
e)
City
Allowance;
(
f)
Leave
Travel
Allowance;
(
g)
Night
Shift
Allowance;
(
h)
Special
Allowance.
It
is
a
matter
of
fact
that
the
Hon’ble
Supreme
Court,
during
the
course
of
appellate^
pleadings,
in
the
captioned
judgment
of
“Surya Roshni Ltd.(
supra),
had^
not
been
made
privy
to
the
above
categorical
clarification/response
to
an^
RTI,
by
the
Regulatory
Body
EPFO,
Ministry
of
Labour
&
Employment,
Govt.^
of
India,
New
Delhi,
confirming
the
non-deduction
of
PF
contribution
on^
above
allowances
by
the
Establishments.
The
EPFO
was
also
a
party
in
the^
said
SC
judgment
and,
as
such,
it
was
duty
bound
to
apprise
the
Hon’ble
Supreme^
Court
about
its
said
clarification/response
to
an
RTI.
In
view
of
the
above
categorical
clarification,
the
stand
of
the
Regulatory
Body
EPFO,^
Ministry
of
Labour
&
Employment,
Govt.
of
India,
New
Delhi,
concerning
the^
non-deduction
of
PF
contribution
on
above
mentioned
allowances,
has
always^
been
very
clear
and
unambiguous,
and,
as
such,
the
establishments,
not^
deducting
PF
contribution
on
such
allowances,
can’t
be
considered
as
defaulters,^
with
retrospective
effect
after
the
above
SC
Judgment.2.2-1-2
CIRCULAR
NO.
C-III/ 110001 / 4 / 3 ( 72 ) 14 /CIRCULAR/HQRS/ 6693
DAT
ED -
6 - 8 - 2014
REGARDING
“INSPECTION
OF
ESTABLISHMENTS
SPLITTING
WAGES^
TO
REDUCE
PF
LIABILITY.”- In
the
said
circular,
the
regulatory
body^
CPFC,
while
interpreting
the
definition
of
“basic
wages”
as
per
section
2 (^
b
)
of
the
Act,
to
include
all
emoluments
which
are
earned
by
an
employee