Applicability of ESI & EPF

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This query is : Resolved

chirag (Querist)

15 August 2010 Hello everyone,, happy independence day,,

My Question is :

I need suggestion on deduction of PF from contract labour payments.

Our company used to get contract labour services (Below 20 employees) from third party i.e. labour contractor. we had accounted their payment directly to contract labour A/C. There is no break up for these payment and paid consoldated amount. but total no. of employees including these contracted labours exceeds 20 employees in company.

please suggest me ..
whether company is liable to comply with provisions of ESI and PF for these contracted labour or not??

thanks in advance
Jai hind

CA Sanat Pyne

CA Sanat Pyne (Expert)

15 August 2010 if bthere is any contract between employer and labour contractor then deduct tds u/s 194C on labour charges. applicability of esi and pf will not come.

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CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)

16 August 2010 I agree with Mr. Sanat regarding applicability of TDS under section 194C & the PF & ESI deduction liability will also not be on you.

BUT... in terms of PF provisions, you have to ensure that the contractor is deducting & depositing PF regularly without any failure.
Best way is to get the copy of PF challan with every month's bill.

If the contractor defaults in deduction / deposit of PF, you will also be at fault. You just have to make sure that the PF of those labourers, who are working at your site, gets deposited regularly.

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