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Allowance - not to be included in the baste wages for calculation of EPF dues. - The Employees Provident Funds and Miscellaneous Provisions Act, 1952

An appeal was filed by the appellant before the Employees' Provident Fund Appellate Tribunal, challenging the order dated 18.06.2015 passed by the EPF Authority, under section 7-A of the Act.

Brief Facts :- Appellant was depositing the EPF dues relating to its employees on their basic wages actually earned by them and not upon. The payment of allowances towards House Rent, Conveyance, Coupons, Child Education, Medical Education, Adhoc, Special, Incentive, LTA etc. During the course of enquiry all relevant record was produced but the EPF Authority has not considered the same just to harass the appellant. Demand of the EPF Authority for PF contributions on the basis of minimum rates of wages is not legally valid. The contention of the EPF Authority is that the appellant is duty bound to deposit EPF dues within the ambit of the provisions of the Act and it cannot be its allowed to take benefit of the weakness of the EPF Authority, if any. By payment of allowances, the appellant cannot be allowed to reduce the PF liability.

Reasons and Decision:- The EPF Authority observed that the liability of the EPF contributions is to be considered within parameters of the provisions of the Act and Scheme and not in an emotional manner. The appellant is liable to pay EPF dues only on the basis of basic wages. Demand of EPF dues on the basis of minimum wages is illegal. Without any provisions of the Act, the EPF Authority is not supposed to include any allowance in basic wages since the same are excluded, in nature, from the basic wages as per provisions of the Act. Just to recover money from the employer in the name of social welfare is not appropriate. Impugned order is entirely on the basis of surmises and conjecture. Hence, it is Set aside. Amount, if any, deposited by the appellant, shall be returned back by the EPF Authority within 30 days from the date of this order, failing which such an amount will attract interest @ 12% per annum from the date of payment till its relalisation.

-M/s. Aptech Limited vs. RPFC ATA No. 801 (9)2016 decided on 11.04.2017.

The Employees Provident Fund and Miscellaneous Provisions Act,1952

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