Contract Labour & Incidence of TDS/ESI/PF

This query is : Resolved

Ranganathan (Querist)
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05 July 2011 A company employs contract labor.Weekly payments made through contractor. TDS/ESI/PF applied. Instead, if the company maintains separate registers under payment of wages act, and applies ESI/PF Acts,and wages disbursed individually (via Contractor), is it necessary to apply TDS? even if the contractor is kept out of picture? As per labor Acts, if ESI/PF is not covered by Contractor, the liability is on the Company to cover. If the company covers ESI/PF, could TDS be avoided by not bringing in the Contractor name.
Ranganathan

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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06 July 2011 Once you have employed contract labour your liability towards PF, ESI, Bonus etc are shifted to the contractor. The only liability is that of TDS and service tax. It is better to take this liability.

If you hire all labours directly then all liability is yours. Wherever TDS is applicable you have to deduct and pay it. But the trouble to maintain the accounts, PF records, ESI registration etc. and in case of any accident you have to run from pillar to post. Now, you decide what to adeopt.

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