Dear seniors,
i am working in a garment export company and it is located in a sez park. here all other companies providing cab facility to their employees so i decided to provide conveyance allowance to our employees but i have to know that conveyance allowance need to detect esi and pf? and i want to know tax detectable limits. any criteria or maximum and minimum level amount.... pls guide me...
From India, Tiruppur
2i am working in a garment export company and it is located in a sez park. here all other companies providing cab facility to their employees so i decided to provide conveyance allowance to our employees but i have to know that conveyance allowance need to detect esi and pf? and i want to know tax detectable limits. any criteria or maximum and minimum level amount.... pls guide me...
From India, Tiruppur
Dear Mr. Naveen.r,
Conveyance and Travel allowances is covered under ESI benefit. The tax detectable limits will be above Rs. 800/- per mensem and above 9600/- per year. Handicapped persons have a non-taxable limits upto Rs.1600 Per month. Please be noted that the employer may pay any sum depending on the bills produced in propos to travel made. This is a benefit that is made my most of the companies. Sometimes it also depends on whose car you are availing i.e., Employer's Car (with or without chaffeur)/ Employee's car for conveyance. This amount is not actually the "Allowance" but it should be called as the reimbursement of Conveyance.
From India, Visakhapatnam
Conveyance and Travel allowances is covered under ESI benefit. The tax detectable limits will be above Rs. 800/- per mensem and above 9600/- per year. Handicapped persons have a non-taxable limits upto Rs.1600 Per month. Please be noted that the employer may pay any sum depending on the bills produced in propos to travel made. This is a benefit that is made my most of the companies. Sometimes it also depends on whose car you are availing i.e., Employer's Car (with or without chaffeur)/ Employee's car for conveyance. This amount is not actually the "Allowance" but it should be called as the reimbursement of Conveyance.
From India, Visakhapatnam
Hi,
I do not know the maximum limit for conveyance allowance, but it shall not be deemed as wages and hence it will not attract ESI (Please refer the attachment).
The same is in case of EPF too, where the Act says, "In respect of establishments employing 20 or more persons and engaged in industry notified under Section 6 of Act ( other than the Establishments. declared as sick ) 12% of the basic pay DA , Cash value of food concession and retaining allowance , if any, subject to a maximum of Rs.6500/- per month. Voluntary higher contributions are also acceptable at the joint request of the member and the employer" .
From India, Erode
I do not know the maximum limit for conveyance allowance, but it shall not be deemed as wages and hence it will not attract ESI (Please refer the attachment).
The same is in case of EPF too, where the Act says, "In respect of establishments employing 20 or more persons and engaged in industry notified under Section 6 of Act ( other than the Establishments. declared as sick ) 12% of the basic pay DA , Cash value of food concession and retaining allowance , if any, subject to a maximum of Rs.6500/- per month. Voluntary higher contributions are also acceptable at the joint request of the member and the employer" .
From India, Erode
Dear All,
Here is the Supreme Court order on EPF contribution on allowances.
Both the acts are applicable on the conveyance allowance.
SUPREME COURT ON EPF CONTRIBUTIONS ON ALLOWANCES
It may be recollected that in a Review Petition by Surya Roshni Limited vs. Employees’ Provident Fund and Another, 2012 LLR 42, Division Bench of Madhya Pradesh High Court has held that Section 2(b) and 6 of the Employees’ Provident Funds & Miscellaneous Provisions Act define basic wages and HRA, overtime allowance, bonus, commission or any other similar allowance are not covered in the definition of basic wages but when special allowance, dearness allowance, conveyance allowance and other allowances are paid universally to all the employees, they would be treated as part and parcel of basic wages.
A special leave petition to appeal, as filed, came up for hearing on 13.7.2012, in which the following order was passed :
ITEM NO.MM-128 COURT NO.12 SECTION XV
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
I.A. NOS.4-5 in
Petition(s) for Special Leave to Appeal (Civil) No(s).8781-8782/2012
(From the judgment and order dated 24-3-2011 in WPC No.1891/2011 and dated 22-11-2011 in RP No.117/2011 of the High Court of M.P. at Gwalior)
SURYA ROSHNI LTD. Petitioner(s)
versus
EMP. PROVIDENT FUND & ANR. Respondent(s)
From India, Gurgaon
Here is the Supreme Court order on EPF contribution on allowances.
Both the acts are applicable on the conveyance allowance.
SUPREME COURT ON EPF CONTRIBUTIONS ON ALLOWANCES
It may be recollected that in a Review Petition by Surya Roshni Limited vs. Employees’ Provident Fund and Another, 2012 LLR 42, Division Bench of Madhya Pradesh High Court has held that Section 2(b) and 6 of the Employees’ Provident Funds & Miscellaneous Provisions Act define basic wages and HRA, overtime allowance, bonus, commission or any other similar allowance are not covered in the definition of basic wages but when special allowance, dearness allowance, conveyance allowance and other allowances are paid universally to all the employees, they would be treated as part and parcel of basic wages.
A special leave petition to appeal, as filed, came up for hearing on 13.7.2012, in which the following order was passed :
ITEM NO.MM-128 COURT NO.12 SECTION XV
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
I.A. NOS.4-5 in
Petition(s) for Special Leave to Appeal (Civil) No(s).8781-8782/2012
(From the judgment and order dated 24-3-2011 in WPC No.1891/2011 and dated 22-11-2011 in RP No.117/2011 of the High Court of M.P. at Gwalior)
SURYA ROSHNI LTD. Petitioner(s)
versus
EMP. PROVIDENT FUND & ANR. Respondent(s)
From India, Gurgaon
Travel allowance is not definitely part of the wages and thus ESI contribution is not to be deducted from it and so far as the conveyance allowance is concerend, going by the Madras High Court judgement in Cosmopolitan Club case, conveyance allowance too is not part of wages for the purpose of deduction of ESI contribution.It appears the views of the High Courts are divided on this issue. In my view, if the conveyance allowance is paid at intervals not exceeding two months may rank for ESI contribution.
B.Saikumar
HR & Labour Law Advsior
Mumbai
From India, Mumbai
B.Saikumar
HR & Labour Law Advsior
Mumbai
From India, Mumbai
So far as the conveaynceallowance for EPF contribution is concerend, it is subject to the order of teh ho'ble Supreme Court in Surya roshini's case.
B.Saikumar
HR & Labour Law Advsior
Mumbai
From India, Mumbai
B.Saikumar
HR & Labour Law Advsior
Mumbai
From India, Mumbai
If the company is paying fixed allowance every month, whether they name it conveyance allowance travel allowance, it would attract ESI deductions.
Conveyance/travel re-imbursement - where the employee travels and sumits the bills as per the company policy or at actual and the same is re-imbursed would not attract ESI deductions.
As far as EPF concerned, deduction is not applicable
From India, Pune
Conveyance/travel re-imbursement - where the employee travels and sumits the bills as per the company policy or at actual and the same is re-imbursed would not attract ESI deductions.
As far as EPF concerned, deduction is not applicable
From India, Pune
conveyance allowance been paid through payroll would attract ESIC (it is deemed necessary to pay esic on conveyance allowance, but must be a part of gross wages).
From India, Delhi
From India, Delhi
Mr. Kamal Prasoon Sinha 's note is highly valid if the conveyance allowance travel allowance is fixed and paid on regular basis it would attract ESIC deductions.
Now I have a little hitch i.e. if the conveyance allowance travel allowance company paid through flexi benefit, which is under CTC ???
Looking forward your expertise opinion?
Thanks & Regards,
Subroto Mukherjee
From India, Mumbai
Now I have a little hitch i.e. if the conveyance allowance travel allowance company paid through flexi benefit, which is under CTC ???
Looking forward your expertise opinion?
Thanks & Regards,
Subroto Mukherjee
From India, Mumbai
Dear All,
Please go through the follwing instruction/circular issued by the ESIC headquaters on travel/conveyance allowance to be/not be considered as wages under ESIC act.
I hope this circular will clear all your doubts on the topic.
regards,
Kamal
================================================== =======
No.T-11/13/53/08/2001-Ins.IV Dated:21/11/2001
Instruction No. 10/2001
To
The Regional Director/Joint Director I/c,
ESI Corporation,
Regional Office/Sub-Regional Office,
Sub: Treating Conveyance Allowance as wages for the purpose of Section 2(9) & Section 2(22) of the ESI Act, 1948.
Sir,
I am to invite your attention to this office Instruction No. 2/97 issued vide letter No.P-11/13/97-Ins.IV dated 27.1.1997 and Item No. 12 of Memorandum No.P-11/13/97-Ins.IV dated 6th Nov., 2000, wherein it was instructed that the traveling allowance for value of any traveling concession, if paid to the employees in the nature of conveyance allowance, the same is neither wages for the purpose of coverage of employees under Section 2(9) nor it is to be treated as wages under Section 2(22) of the ESI Act for the purpose of payment of contribution.
In the meanwhile conflicting judgments by some High Courts have been received, necessitating the review of the Instruction No. 2/97 dated 27.1.1997, and Memo dated 6th Nov.2000. The Madras High Court in its judgment dated 14.11.2000 in LPA No.50/98 (2001 LLR 489 ) has held that the conveyance allowance paid by the employer to the employees for commuting between residence and place of work should not be taken as wages as the same is nothing but traveling allowance for the purpose of Section 2(22)(b) of the ESI Act.
In another case where transport allowance was paid to the employees by the employer as per a settlement signed by the Employees� Union and the Management, the High Court of Karnataka has held in its Judgment dated 16th March, 2001 (MFA No. 2827/1999) that the transport allowance should be treated as wages as it flows out of a wage settlement thereby it has come within the first part of the definition of wages under Section 2(22) of ESI Act. There is a small difference in perspective. Whereas the Madras High Court has taken conveyance allowance per se, the High Court of Karnataka has specifically dealt with a case of transport allowance/conveyance allowance payable under a wage settlement. However two different interpretations can not be made by us for same nature of payment allowed under identical circumstances. Therefore, it has been decided to accept the rationale behind the decision of the Karnataka High Court and accordingly it is advised that fixed conveyance allowance flowing out of a wage settlement should be treated as wages for all purposes.
However the following should not be treated as wages under Section 2(22) of ESI Act and also for the purpose of deciding coverage of an employee under Section 2(9) of ESI Act.
1. Amount towards conveyance paid or reimbursed to any employee for incurring expenses for specific duty related journey.
2. Reimbursement of actual cost of conveyance for coming to work and going from work on production of ticket or season ticket and subject to proof of actual expenditure.
3. Payment of certain amount for maintenance of vehicle depending upon Cadre of the official and category of vehicle and subject to production of records for actually maintaining the vehicles.
4. Fixed conveyance allowance paid at an interval exceeding 2 months, unless such payment is made as per contract or agreement .
The Instruction No. 2/97 dated 27.1.1997 and item No. 12 of Memorandum dated 6th Nov. 2000 stand modified accordingly.
This issues with the approval of the Insurance Commissioner.
Please acknowledge the receipt.
Yours faithfully,
(O. ABDUL HAMEED )
ADDL. COMMISSIONER(REV.)
Copy to:
1. Joint Director(Fin.)/Dy. Director(Fin.), R.O./SRO ____________________.
2. Joint Director (Vigilance)____________________________Zone.
3. All Officers at Hqrs. Office.
4. All Branches, Hqrs. Office,
5. Guard File.
JOINT DIRECTOR (REVENUE )
================================================== =========
From India, Pune
Please go through the follwing instruction/circular issued by the ESIC headquaters on travel/conveyance allowance to be/not be considered as wages under ESIC act.
I hope this circular will clear all your doubts on the topic.
regards,
Kamal
================================================== =======
No.T-11/13/53/08/2001-Ins.IV Dated:21/11/2001
Instruction No. 10/2001
To
The Regional Director/Joint Director I/c,
ESI Corporation,
Regional Office/Sub-Regional Office,
Sub: Treating Conveyance Allowance as wages for the purpose of Section 2(9) & Section 2(22) of the ESI Act, 1948.
Sir,
I am to invite your attention to this office Instruction No. 2/97 issued vide letter No.P-11/13/97-Ins.IV dated 27.1.1997 and Item No. 12 of Memorandum No.P-11/13/97-Ins.IV dated 6th Nov., 2000, wherein it was instructed that the traveling allowance for value of any traveling concession, if paid to the employees in the nature of conveyance allowance, the same is neither wages for the purpose of coverage of employees under Section 2(9) nor it is to be treated as wages under Section 2(22) of the ESI Act for the purpose of payment of contribution.
In the meanwhile conflicting judgments by some High Courts have been received, necessitating the review of the Instruction No. 2/97 dated 27.1.1997, and Memo dated 6th Nov.2000. The Madras High Court in its judgment dated 14.11.2000 in LPA No.50/98 (2001 LLR 489 ) has held that the conveyance allowance paid by the employer to the employees for commuting between residence and place of work should not be taken as wages as the same is nothing but traveling allowance for the purpose of Section 2(22)(b) of the ESI Act.
In another case where transport allowance was paid to the employees by the employer as per a settlement signed by the Employees� Union and the Management, the High Court of Karnataka has held in its Judgment dated 16th March, 2001 (MFA No. 2827/1999) that the transport allowance should be treated as wages as it flows out of a wage settlement thereby it has come within the first part of the definition of wages under Section 2(22) of ESI Act. There is a small difference in perspective. Whereas the Madras High Court has taken conveyance allowance per se, the High Court of Karnataka has specifically dealt with a case of transport allowance/conveyance allowance payable under a wage settlement. However two different interpretations can not be made by us for same nature of payment allowed under identical circumstances. Therefore, it has been decided to accept the rationale behind the decision of the Karnataka High Court and accordingly it is advised that fixed conveyance allowance flowing out of a wage settlement should be treated as wages for all purposes.
However the following should not be treated as wages under Section 2(22) of ESI Act and also for the purpose of deciding coverage of an employee under Section 2(9) of ESI Act.
1. Amount towards conveyance paid or reimbursed to any employee for incurring expenses for specific duty related journey.
2. Reimbursement of actual cost of conveyance for coming to work and going from work on production of ticket or season ticket and subject to proof of actual expenditure.
3. Payment of certain amount for maintenance of vehicle depending upon Cadre of the official and category of vehicle and subject to production of records for actually maintaining the vehicles.
4. Fixed conveyance allowance paid at an interval exceeding 2 months, unless such payment is made as per contract or agreement .
The Instruction No. 2/97 dated 27.1.1997 and item No. 12 of Memorandum dated 6th Nov. 2000 stand modified accordingly.
This issues with the approval of the Insurance Commissioner.
Please acknowledge the receipt.
Yours faithfully,
(O. ABDUL HAMEED )
ADDL. COMMISSIONER(REV.)
Copy to:
1. Joint Director(Fin.)/Dy. Director(Fin.), R.O./SRO ____________________.
2. Joint Director (Vigilance)____________________________Zone.
3. All Officers at Hqrs. Office.
4. All Branches, Hqrs. Office,
5. Guard File.
JOINT DIRECTOR (REVENUE )
================================================== =========
From India, Pune
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