We are an establishment started in 1999 & covered under EPF act since April 2008. At the time of registration we were granted a provisional a/c no. After 4 years in this month an enforcement officer visited for inspection to check as whether we have falsified the records & the coverage was applicable from the earlier date itself.
The officer has made the following contentions.
1] We are required to produce all the employee records & books of accounts right from the date of start of business
Otherwise the establishment will be liable for coverage from day 1. We have provided balance sheets from 1999 to
date & employee attendance & salary records from 2003-04 onwards but it is not acceptable.
2] We have given components for assembly work to family members of our employees only as & when needed. The sole
objective is to help our own employees to have some extra income. These employees are already covered under EPF.
We have paid amounts to such persons who are not on the payroll in cash on vouchers & the amounts are accounted
as labour charges in the books. After inspection of the books, it is being contended that all these people are
employees of the company & after adding such name the coverage goes back to 2004. As such there is a lot of
confusion about what is a correct definition of an employee & applicability of coverage. The inspector
is even adding names of persons such as plumber,carpenter etc.who have done occasional repair work as
employees & trying to push the coverage to earliest date. A sweeper who works in 5 different companies is also
deemed to be an employee.
Has anyone encountered such situation. Please suggest.
CAclubindia
