Now businesses running private trusts to manage the provident fund (PF) of their employees will either have to comply with online PF return filing requirement, or face consequences. For, the Provident Fund office has issued compliance guidelines for employers maintaining private provident fund trusts. This comes in the wake of EPFO noticing that more than 700 employers maintaining private provident fund trusts have not filed the online return for the month of July 2017.
As per a Tax Alert by EY, EPFO has recently issued a circular providing compliance guidelines for employers maintaining private provident fund trusts. The PF offices have been directed to issue show cause notices to all the defaulting employers and trusts that have not filed the online returns on or before 05 October 2017. EPFO has also asked the trusts to put in place a mechanism to communicate with the employees through text messages on mobile phone, email or mobile epassbook about the receipt of contribution in their account every month within 2 days of receipt of remittance from the employer.
Trusts have also been directed to declare interest at par or more than the EPFO. As per the PF law, any deficiency in the interest is to be made good by the employer. Also, appropriate action should be taken against the defaulting employers and trusts, including cancellation of exemption or withdrawal of relaxation.
As per a separate circular issued recently, the EPFO has also commenced real-time monitoring of performance of the employers maintaining private provident fund trusts. The performance will be evaluated on the basis of certain parameters. Then a rank list will be prepared for employers maintaining private provident fund trusts and will be published on the website of EPFO every month.
Commenting on the same, Sonu Iyer, Tax Partner & People Advisory Services Leader, EY India, says, “The new online return form for employers maintaining private provident fund trusts was introduced to streamline the monitoring and supervision of the performance of such trusts under the Provident Fund law. It is essential that employers maintaining private provident fund trusts (a) review the rank list as available on the EPFO website, (b) review the status of compliance of their private provident fund trust, and (c) take corrective actions in case there is any non-compliance.”
This is essential as any non-compliance by the employers and private provident fund trusts may lead to various penalties, surcharge and other consequences laid down in the provident fund law. Non-compliance may also lead to cancellation of exemption / relaxation granted to the employer.