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Special allowance not necessarily tobe treated as basic wages for EPF contributions. - 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 26.06.2012, passed by the EPF Authority, under section 7A of the Act.

Brief Facts :- The appellant moved an application under Section 7(O) of the Act, seeking waiver of pre-deposit. The EPF Appellate Tribunal directed the appellant to deposit 40% of the assessed amount as pre-deposit for filing the appeal. Appellant challenged that order before the High Court on the basis of a letter received by him from RPFC in response to an RTI application, indicating that special allowance does not attract PF contributions and making a reference to a circular issued by the CPFC wherein it has been stated that special allowance is not a part of basic wages for the purpose of PF contributions. The main grievance of the appellant is that EPF Authority has taken Special allowance as a part of basic wages which is not proper. The High Court directed the Tribunal for reconsideration.

Reasons and Decision:- The EPF Appellate Tribunal observed that the issue involved is as to whether special allowance will form the part of basic wages or not which is pending consideration before the Hon'ble Supreme Court of India in SLP, therefore, to give any finding on it at this stage, will not be appropriate. The Act is a beneficiary Social Security Legislation. Section 7(O) of the Act provides deposit of 75% of the assessed amount for filing of appeal against impugned order. The EPF Appellate Tribunal has been empowered to waive or reduce the amount of pre-deposit by recording reasons thereto in writing. In view of contents of letter received from RPFC by the appellant In response to an RTI application, indicating that special allowance does not attract PF contributiors and that of the circular issued by the CPFC wherein it has been stated that special allowance is not a part of basic wages for the purpose of PF contributions, the EPF Tribunal reduced the amount of pre-deposit to 25% of the assessed amount.

-Msource India Pvt. Ltd. vs. RPFC, Benguluru Appeal No. A/KN-21/2017(2012) decided 04.05.2017


The Employees Provident Fund and Miscellaneous Provisions Act,1952

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