Dear Members,
We are a Mumbai based organization. We started our business in April 1999.
On reaching an employee count of 20, In 2008 we made an application to the EPFO for coverage wef 01/04/2008. Accordingly a registration was given & since then we have been remitting contributions regularly.
In May2012, 4 years after we started remitting the contributions an enforcement officer visited us for inspection to determine the applicability of the date of coverage. For this purpose, he wanted all the employee records from the date of start of the business. Since we were ignorant about maintaining all records & under IT as well as VAT 6 years are allowed, we had destroyed earlier records, but submitted records from 01/04/2004 & also all the balance sheets from starting the company. However without taking cognizance of the submitted documents & the reasons, we have been now issued a notice under 7A.
Another issue which we find of immense concern is that as what is the definition of an EMPLOYEE. We have been giving very small jobs at home to families of our own employees, solely to provide an extra income to them. The jobs are intermittent & sporadic. But the enforcement officer had said that all these family members are also the employees & thus determine the applicability.
We shall be grateful for appropriate guidance & assistance.
From India, Mumbai
1We are a Mumbai based organization. We started our business in April 1999.
On reaching an employee count of 20, In 2008 we made an application to the EPFO for coverage wef 01/04/2008. Accordingly a registration was given & since then we have been remitting contributions regularly.
In May2012, 4 years after we started remitting the contributions an enforcement officer visited us for inspection to determine the applicability of the date of coverage. For this purpose, he wanted all the employee records from the date of start of the business. Since we were ignorant about maintaining all records & under IT as well as VAT 6 years are allowed, we had destroyed earlier records, but submitted records from 01/04/2004 & also all the balance sheets from starting the company. However without taking cognizance of the submitted documents & the reasons, we have been now issued a notice under 7A.
Another issue which we find of immense concern is that as what is the definition of an EMPLOYEE. We have been giving very small jobs at home to families of our own employees, solely to provide an extra income to them. The jobs are intermittent & sporadic. But the enforcement officer had said that all these family members are also the employees & thus determine the applicability.
We shall be grateful for appropriate guidance & assistance.
From India, Mumbai
If you have filed returns in time, there is no meaning in conducting a 7 A enquiry after the expiry of four years. Therefore, it is desirable to attend the enquiry with a legal representative and explain the relevant clauses in Law of Limitation.
Regarding the coverage of outworkers, there are differences of opinion. The family members of the employees can be treated as your contract workers and the payment made to them would fall within coverage. This is because the work or at least the final output is subject to your supervision and you will become the Principal employer when you have control over the production made outside the factory once it is established that control and supervision are with you. It is also very easy to establish the relationship when it is very clear that you only supply the materials required to be rolled out.
In view of the above, I suggest you to represent the matter with a proper legal advice only.
Regards,
Madhu.T.K
From India, Kannur
Regarding the coverage of outworkers, there are differences of opinion. The family members of the employees can be treated as your contract workers and the payment made to them would fall within coverage. This is because the work or at least the final output is subject to your supervision and you will become the Principal employer when you have control over the production made outside the factory once it is established that control and supervision are with you. It is also very easy to establish the relationship when it is very clear that you only supply the materials required to be rolled out.
In view of the above, I suggest you to represent the matter with a proper legal advice only.
Regards,
Madhu.T.K
From India, Kannur
Dear Madhu,
Thanks for your feedback.
I was not sure about the law of limitation & I read somewhere that the EPF officers have powers to reopen a matter up to 5 years. I hope that I am wrong.
Each & every return as well as monthly payments have been very prompt right from 1st date of coverage.
Regarding coverage of family members of the staff, we are going over our books very carefully to check everything once again. But in this case, during inspection visit nothing substantial was observed except the payment made to the sweeper.
What I am not sure about how to tackle the issue of the requirement of producing employee records from day 1. Is this also covered by the law of limitation.
From India, Mumbai
Thanks for your feedback.
I was not sure about the law of limitation & I read somewhere that the EPF officers have powers to reopen a matter up to 5 years. I hope that I am wrong.
Each & every return as well as monthly payments have been very prompt right from 1st date of coverage.
Regarding coverage of family members of the staff, we are going over our books very carefully to check everything once again. But in this case, during inspection visit nothing substantial was observed except the payment made to the sweeper.
What I am not sure about how to tackle the issue of the requirement of producing employee records from day 1. Is this also covered by the law of limitation.
From India, Mumbai
Hello,
We have now received a summons u/s. 7-A to appear before the RPFO. The summons states that we have failed to remit dues for the period till June 2012, since the date of coverage(01-04-2008). The summons itself is dated 29 June 2012.
We have paid dues for all the years, by the due date & have also filed monthly as well as annual returns on time. This record was shown to the enforcement officer during his visit to our office. This is also recorded in his visit report.
We are unable to understand as why such summons is issued. Moreover since Feb.2012 if not the entire record, at least from Feb. to June 12 are online & acknowledgments of payments are also generated from the EPFO site.
We shall be grateful for inputs to deal with this situation.
From India, Mumbai
We have now received a summons u/s. 7-A to appear before the RPFO. The summons states that we have failed to remit dues for the period till June 2012, since the date of coverage(01-04-2008). The summons itself is dated 29 June 2012.
We have paid dues for all the years, by the due date & have also filed monthly as well as annual returns on time. This record was shown to the enforcement officer during his visit to our office. This is also recorded in his visit report.
We are unable to understand as why such summons is issued. Moreover since Feb.2012 if not the entire record, at least from Feb. to June 12 are online & acknowledgments of payments are also generated from the EPFO site.
We shall be grateful for inputs to deal with this situation.
From India, Mumbai
I just personally attended the 7-A enquiry.
Our reply to the show cause notice was not on record.
The AC said that had that reply been on record, he would not have issued summons.
The enforcement officer's report filed states that from the contents of 2010-11 audited balance sheet he suspects that PF dues have not been paid on some amounts which are presumably labour charges. Since our books are clear, we hope that the issue will be resolved in the next hearing.
For determination of the date of applicability, he stated that they can go back all the way till the date of inception of the company.
He also informed to take up this with the concerned EO.
In this regard, the question which arises is as under :-
1] How to tackle the issue of the deviations in the office report filed by the
EO, with respect to the report prepared during visit. In this case, the office
report prepared by the EO did not apparently indicate that the monthly &
annual returns were checked & also that record upto 4 years prior to the
registration were also inspected to determine the applicability.
From India, Mumbai
Our reply to the show cause notice was not on record.
The AC said that had that reply been on record, he would not have issued summons.
The enforcement officer's report filed states that from the contents of 2010-11 audited balance sheet he suspects that PF dues have not been paid on some amounts which are presumably labour charges. Since our books are clear, we hope that the issue will be resolved in the next hearing.
For determination of the date of applicability, he stated that they can go back all the way till the date of inception of the company.
He also informed to take up this with the concerned EO.
In this regard, the question which arises is as under :-
1] How to tackle the issue of the deviations in the office report filed by the
EO, with respect to the report prepared during visit. In this case, the office
report prepared by the EO did not apparently indicate that the monthly &
annual returns were checked & also that record upto 4 years prior to the
registration were also inspected to determine the applicability.
From India, Mumbai
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EPF Act.ppt