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Practical issue in pf act

Arun Agrawal (Credit Manager (SME and LAP) at Religare Finvest Limited) (46 Points)

12 December 2012

Dear Professionals

i have one practical doubt in P.F.

In case of labour contract, contractor will send details of wages paid (of person employed by him) to the principal employer (or say service receiver) within seven day of the end of the month, and also it is responsibility of the principal employer to deposit the PF and submit the return.

But practically i have seen contractor himself register under PF act, deposit the PF dues (in respect of labour provided by him) and also submit the return for the same.

So is there any department notification or any thing else in this regard?

Thank you in anticipation.

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4 Replies

CA AYUSH AGRAWAL (Kolkata-Pune-Mumbai) (26986 Points)
Replied 12 December 2012

After Proper Modification:-

Provision under the PF Act

‘Chapter: Contributions

Principal employer to pay contributions in the first instance

(1) The principal employer shall pay in respect of every employee, whether directly employed by him or by or through an immediate employer, both the employer’s contribution and the employee’s contribution.

(2) Notwithstanding anything contained in any other enactment but subject to the provisions of this Act and the regulations, if any, made thereunder, the principal employer shall, in the case of an employee directly employed by him (not being an exempted employee), be entitled to recover from the employee the employee’s contribution by deduction from his wages and not otherwise’ …….

(4) Any sum deducted by the principal employer from wages under this Act shall be deemed to have been entrusted to him by the employee for the purpose of paying the contribution in respect of which it was deducted.

(5) The principal employer shall bear the expenses of remitting the contributions to the Corporation.

In respect of employees employed by or through a contractor, the contractor

shall recover the contribution payable by such employee (in this Scheme referred to as the

member’s contribution) and shall pay to the principal employer the amount of member’s

contribution so deducted together with an equal amount of contribution (in this Scheme

referred to as the employer’s contribution) and also administrative charges.

Finally, I Dont Think, There Could be Problem Arise due to PF Paying Directly by Contractor.

2 Like

Arun Agrawal (Credit Manager (SME and LAP) at Religare Finvest Limited) (46 Points)
Replied 12 December 2012

Pls further clarify

Who will deposit the PF due and submit the return to pf Authority, labour contractor (or say man power supplier) or the principal employer (to whom labour is supplied by contractor)

CA AYUSH AGRAWAL (Kolkata-Pune-Mumbai) (26986 Points)
Replied 12 December 2012

Originally posted by : Arun Agrawal
	Pls further clarify Who will deposit the PF due and submit the return to pf Authority, labour contractor (or say man power supplier) or the principal employer (to whom labour is supplied by contractor)

Its Liablity of Principle Employer

Arun Agrawal (Credit Manager (SME and LAP) at Religare Finvest Limited) (46 Points)
Replied 12 December 2012

Thank you for resolving the problem. Finally I conclude that, the approach of depositing the PF contribution and submitting the return by Labour contractor is not justifiable as per PF Act.