The PF Department officials are now repeatedly relying upon the judgment of Karnataka reported in 2004, LLR page 540 in the case of Group IV Securities Guarding Ltd., Vs. RPF Commissioner where the High court of Karnataka held that the authority under section 7-A of the Act into the question of as to whether the wages being paid to the employees have been split under various heads with an ulterior motive to avoid EPF contributions.
Aggrieved by the same an appeal was filed before the Supreme Court and the Hon’ble Supreme court have directed the PF Commissioner to dispose off the matter without being influenced by the observations in the said case and further stated that the observations made by the Karnataka High Court should not be taken as conclusive but it is only a tentative.
With the said direction, the matter was remanded back to the PF authorities for fresh disposal.
Therefore, the judgment of Group-4 Securities is no longer a valid judgment and no final order is passed by the PF authorities in Karnataka till this date.
The E.P.F Appellate Tribunal, New Delhi have already passed orders in the following cases confirming that contributions are required to be paid only Basic and D.A and not on any other allowances .
a). St. Anne’s School Vs APFC , Patna, it was held that the EPF contributions are not required to be paid on house rent allowance, medical allowance, conveyance allowance etc.
b). M/s . Old Anchor Vs APFC, Goa, it was held that EPF contributions are not required to be paid on food allowance and special allowances.
c). V.M. Salgaocar & Bros. Pvt. Ltd. Vs APFC, Panaji, it was held that EPF contributions are not required to be paid on supplementary allowance.
d). M/s. Hotel Lalitha Vs APFC, Patna it was held that EPF contributions are not required to be paid on staff food.
