Ranbaxy Laboratories. Bharat Heavy Electricals Ltd, Sapient Corporation. Balrampur Chini Mills. Mc-Cann Erickson India. Doon School. Institute of Economic Growth.
Wondering what these have in common? These companies and institutions, along with 51 others, await Saturday?s meeting of the Employees? Provident Fund Organisation (EPFO) Board for clarity on the tax treatment of their PF trusts. Thousands of companies, who run their own PF trusts to save their workers the hassles of dealing with red tape in PF offices and deliver them better returns, have been in a tizzy since the 2006 Budget.
To continue getting income tax exemption on PF contributions, the Finance Bill of 2006 required such entities to get a fresh certificate from the EPF authorities, exempting them from contributing funds to EPFO since they had their own PF trusts.
While the finance ministry extended the original March 2007 deadline in the last two Budgets, doubts raised by the labour ministry on a PF board decision taken in 1989 will delay all pending applications.
So far, exemption cases were placed before the board only for procedural clearance after the Central PF Commissioner (CPFC) examined and approved them.
The board had empowered CPFC to grant exemptions in 1989. The ministry recently consulted the department of legal affairs, which advised that the board cannot delegate these functions.
So, while Ranbaxy and others may get the board?s green signal, the rest will find the going tougher as labour minister Oscar Fernandes has decided that going forward, all cases of exemption would be placed before the board for clearance.