Types
of Exemption
An
establishment covered under the Employees' Provident Fund & Miscellaneous
Provisions Act 1952 is required to comply with the statutory provisions of the
Act and also the provisions of the Schemes framed under the Act namely
Employees' Provident Fund Scheme, 1952, Employees' Pension Scheme Scheme, 1995
and Employees' Deposit Linked Insurance Schemes, 1976.
However, the Act provides for grant of exemption from the operation of the Act and also exemption from the operation of the Schemes framed under the Act. Thus, the types of exemptions provided under the Act may be broadly classified as under:
However, the Act provides for grant of exemption from the operation of the Act and also exemption from the operation of the Schemes framed under the Act. Thus, the types of exemptions provided under the Act may be broadly classified as under:
- Exemption from the Act (
Including the Schemes ), under Section -16 (2) of the
Act.
- Exemption from the operation of
the Scheme(s) viz. Employees' Provident Fund Scheme / Employees' Pension
Scheme /Employees' Deposit Linked Insurance Schemes.
(a)
Exemption
from the Act ( Including the Schemes ):
This type of Exemption is allowed
under Section 16(2) of the Act by the Central Government.
Exemption from the Act is allowed only to a class of establishments. It
is granted considering the financial or other circumstances of the class of
establishments. This exemption can be given prospectively or
retrospectively. It is allowed for a specified period only. The classes
of establishments for which this type of exemption currently in force
are:
- Establishments registered under
the Societies Registration Act, 1860, run mainly on grants-in-aid received
from the Central Government or the State Government. Establishments which
are employing only ex-servicemen who are in receipt of pension benefits as
admissible under the trust rules for a period of 5 years w.e.f.
18-02-2000. (Notification dated on 5.4.2000)
- Voluntary organisations engaged in leprosy eradication programmes.
(b) Exemption from the
operation of the Scheme(s) viz. Employees' Provident Fund Scheme / Employees'
Pension Scheme /Employees' Deposit Linked Insurance Schemes:
In this type of exemption, it is only an exemption from the operation of a specified scheme and not from the Act. Apart from granting exemption to an establishment from the operation of a particular scheme, the Act also provides for grant of exemption to an individual employee and also to a class of employees. Thus, exemption from the operation of the Scheme is granted:
- To an establishment as a whole.
- To an individual employee (
under the Employees' Provident Fund & Employees' Deposit Linked
Insurance Scheme only )
To a class of employees.
Issue
of Relaxation order under the Employees' Provident Fund & Employees'
Deposit Linked Insurance Schemes :
Before
granting exemption to an establishment the application of the establishment and
also the rules of the Fund are required to be scrutinised for considering the
grant of exemption. As it may take some time to process the application, the
Regional Provident Fund Commissioner / Central Provident Fund Commissioner as
the case may be, may issue a relaxation order to the establishment specifying
that the establishment may not, pending grant of exemption:
- Submit the returns required to
be submitted under the Scheme.
- Remit the dues to the
Fund
- Transfer the accumulations from
the existing Fund to the C.B.T., Employees' Provident Fund.
The
Regional Provident Fund Commissioner / Central Provident Fund Commissioner may
also impose certain other conditions on maintenance of accounts, enrolment of
members, Investment of monies, payment of inspection charges and submission of
returns etc., in the Relaxation Order. For all practical purposes the
establishment under Relaxation Order shall be treated on par with the
establishment granted exemption. The Relaxation Order is issued under para
28(7) of the Employees' Deposit Linked Insurance Scheme.
Exemption
from the operation of Employees' Provident Fund Scheme , 1952:
Exemption
from the operation of Employees' Provident Funds to an establishment as a
whole, is granted either under Section 17(1)(a) or under Section 17 (1)(b) of
the Act.
Exemption under Section 17
(1)(a):
The grant of exemption to an establishment under Section 17 (1)(a) is considered where the rates of contribution are not less favourable then the statutory rates provided in Section 6 of the Act and the employees are also in enjoyment of other PF benefits which are also on the whole not less favourable than the benefits provided under the Act / Scheme. The authority to grant this exemption is the 'Appropriate Government', as defined in Section 2(a) of the Act ( Central / State Government, as the case may be ) and notified in Gazette.
Exemption
under Section 17(1)(b):
Exemption
under Section 17 (1)(b) is granted where the employees in
establishment are in enjoyment of benefits in the nature of Provident Fund,
Pension or gratuity which are separately or jointly on the whole not less
favourable than the benefits provided under the Act / Scheme. It is granted by
the 'Appropriate Government ', through a notification in the gazette.
Payment
of Inspection charges :
The
establishment to which Relaxation Order is issued / exemption is granted is
required to pay Inspection charges @ 0.18% of total wages on which Provident
Fund is recovered, to the Regional Provident Fund Commissioner concerned by
deposit in cash / local cheque in S.B.I. to the credit in A/C No. 2 of the
Employees' Provident Fund, through prescribed challan.
Exemption
of an Employee : (Employees' Provident Fund Scheme ,52 )
Section
17 (2) read with para-27 of
the Employees' Provident Fund Scheme provides for exemption from the operation
of all or any of the provisions of the scheme to an individual employee. It is
granted by the Regional Provident Fund Commissioner on the receipt of
application in Form-1 from the employee. The exemption is granted where an
employee is entitled to benefits in the nature of Provident Fund, gratuity or
old age pension and such benefits separately or jointly are on the whole not
less favourable than the benefits provided under the Act and Scheme.
The
re-election is permitted only once on each account.
Exemption
of a Class of Employees : ( Employees' Provident Fund Scheme ,52 )
Section
17 (2) read with para-27A of
the Employees' Provident Fund Scheme provides for grant of exemption from the
operation of all or any of the provisions of the scheme to a class of
employees. It is granted by the appropriate Government on the receipt of
application from the employer. The exemption is granted where employees are
entitled to benefits in the nature of Provident Fund, gratuity or old age
pension and such benefits separately or jointly are on the whole not less
favourable than the benefits provided under the Act and Scheme.
Wherever the exemption to a class of employees is granted,
the employer is required to submit a monthly return to the Regional Provident
Fund Commissioner in the prescribed Performa. The due date for submission of
this return is 25th of the month following that to which it relates. The
employer is required to pay Inspection Charges @ 0.18% on wages of employees
exempted and invest the Provident Fund monies in accordance with the pattern of
investment prescribed by the Central Government. The class of employee may
again be permitted to join the statutory fund. The re-election is permitted
only once on each account.
|
S.No.
|
Nature
of Exemption
|
Granted
under Act/Scheme
|
Authority
to grant exemption
|
Authority
to issue Relaxation Order
|
Remarks
|
|
1.
|
Exemption from the Act
|
Section 16(2) of the Act
|
Central Government
|
N.A.
|
Exemption to a class of
Establishment only for a specified period.
|
|
2.
|
Exemption from the operation of
Employees' Provident Fund Scheme'52
|
Section 17(1)(a) or 17(1)(b)
|
Appropriate Government
|
Regional Provident Fund
Commissioner. (para79)
|
Exemption to an Establishment as a
whole.
|
|
3.
|
- Do -
|
Section 17(2) read with para 27-A
of Employees' Provident Fund Scheme
|
Appropriate Government
|
Regional Provident Fund
Commissioner. (para 79)
|
To a class of employees.
|
|
4.
|
- Do -
|
Section 17(2) read with para 27 of
Employees' Provident Fund Scheme
|
Regional Provident Fund
Commissioner
|
|
To an individual employee.
|
|
5.
|
Exemption from the operation of
the Employees' Pension Scheme '95
|
Section 17 (1C)
|
Appropriate Government
|
|
To an Establishment as a whole.
|
|
6.
|
- Do -
|
Section 17 (1C)
|
Appropriate Government
|
|
To a class of Establishment
|
|
7.
|
Exemption from the operation of
Employees' Deposit Linked Insurance Scheme '76
|
Section 17 (2-A)
|
Central Provident Fund
Commissioner
|
Regional Provident Fund
Commissioner. (para28(7))
|
To an Establishment as a
whole
|
|
8.
|
- Do -
|
Section 17 (2B) read with
para28(4)
|
Central Provident Fund
Commissioner
|
- Do -
|
To a class of employees.
|
|
9.
|
- Do -
|
Section 17(2B) read with para28(1)
|
Regional Provident Fund
Commissioner
|
-
|
To an individual employee.
|
Exemption
from Employees' Family Pension Scheme '95
Section
17 (1C) of an Act provides for grant of exemption from the operation
of Employees' Pension Scheme, 1995 . It is granted by the Appropriate
Government through a notification in the official Gazette. Exemption may be
granted to an establishment as a whole or to a class of establishments . The
grant of exemption is subject to the conditions specified by the Appropriate
Government . The exemption is granted where the establishment or the class of
establishments are in enjoyment of benefits in a nature of pensionary benefits
which are at par or, are more favourable then the benefits provided under this
Scheme.
Exemption
from the Employees' Deposit Linked Insurance Scheme '76 :
Section
17 (2A) of an Act provides for grant
of exemption from the operation of Employees' Deposit Linked Insurance Scheme
,1976 . It is granted to an establishment , where the employees are
without making any separate contribution or payment of premium , are in
enjoyment of benefits in the nature of Life Insurance whether linked to their
deposits in Provident Fund or not and such benefits are more favourable than
the benefits admissible under the Insurance Scheme . It is granted by the
Central Provident Fund Commissioner by notification in the official gazette and
is subject to conditions that may be specified in the notification . It is
granted either prospectively or retrospectively .
Pending
grant of exemption to an establishment relaxation order may be issued under para-28(7) of
the Employees' Deposit Linked Insurance Scheme,1976 by a Regional Provident
Fund Commissioner .
An
establishment exempted from the operation of the Employees' Deposit Linked
Insurance Scheme ,1976 is required to submit a monthly return to the Regional
Provident Fund Commissioner .
Para-28(4) of the Scheme provides for grant of exemption by the
Central Provident Fund Commissioner to any class of employees . Under Section
17 (2B) read with Para-28(1) of the Employees'
Deposit Linked Insurance Scheme,1976, the Regional Provident Fund Commissioner
may grant exemption from the operation of any or all of the provisions of the
Employee Deposit Linked Insurance Scheme to an employee.
The establishment shall pay inspection charges at the rate
of 0.005% of the basic wages and Dearness Allowance subject to a minimum of
Re.1/- per month .
