Hello Pirya Ji
As per Employee Concern
The Payment of Gratuity Act 1972:- Gratuity is a voluntary Payment made by the employer to the employee in recognition of continuous, meritorious services and sincere efforts by the employee towards the organization.It is governed under the Payment of Gratuity Act 1972.
It is an Act to provide for a scheme for the payment of gratuity to employees engaged in factories, mines, Oilfields, plantations, ports, railway companies, and shops or other establishments.
Since the Act doesn't direct for mandatpry applicability. Hence its upto the company they want to be applied in the company or not ? If compnay decides that the same will be applied then it shall be form part of CTC to the employees have completed 5 year of service. Hence if the the same included in CTC the employees who have not completed 5 year then its wrong and not as per PGA 1972. So correspondengly u can report in ur audit report.
However if an employees leave the organisation before 5 year then he cannot claim the same.
As per Company is concern: -
If a employees is employed by the company the company is reuired to recognised the all costs associated to that employee whether it is current or payble in future, similarly the Gratuity cost is also a cost payble by the company to the employees who have complted the services of 5 year. Hence company assumes that the employees employed shall be continued for 5 year and correspondingly account for liability of Gratuity.
Consequence of the employess when he leave the organisatio before 5 year.
Read at this link also
Hope u got clarified.