Retirement fund body EPFO on Wednesday deferred payment of March contributions till May 15 to provide relief to 6 lakh firms and over 5 crore subscribers in the wake lockdown to contain COVID-19.
The contributions towards social security schemes - run by Employees' Provident Fund Organisation (EPFO) - for March was due till April 15, which has been extended till May 15.
"Considering the unprecedented situation created by COVID-19 and lockdown announced by the Central Government from March 24, 2020 midnight onwards to prevent the spread of Covid-19, the due date for filing of Electronic Challan Cum Return (ECR) for wage month March, 2020 is extended up to May 15, 2020 for employers who have paid wages to their employees for March, 2020," a Labour Ministry statement said.
According to the statement, the due date for March, 2020 is usually April 15, 2020, so grace period of thirty days has been allowed to the establishments covered under EPF & MP Act, 1952 to remit the contributions and administrative charges due for March, 2020.
This decision of Ministry of Labour and Employment is to support and provide relief to employers of establishments which have disbursed wages for March, 2020 to its employees and an incentive to employers for wage payment to employees during COVID-19 pandemic, it said.
The move is in keeping with the objective of the Pradhan Mantri Garib Kalyan Yojana to prevent disruption in employment and ensure earning to employees to help them fight the pandemic, it added.
This relief will benefit about 6 lakh establishments to file ECRs without default by paying salary to about five crore employees.
The employers have to declare the date of disbursement of wage for March, 2020 in the ECR for the month.
The ECR, with the said declaration, and contributions and administrative charges for March, 2020 are now due on or before May 15, 2020.
The employers disbursing the wages for March, not only get relief of extension of due date for payment of EPF dues but also avoid liability of interest and penalty, if they remit on or before May 15, 2020.
"A much needed relief by the provident fund authorities even though a one-time relief. Organizations will now have 30 additional days to make contribution towards provident fund for the month of March 2020.
"However, this relief comes with a caveat of certifying disbursement of wages for the month of March 2020 and declaring the date of disbursement. The relief has been extended to all organizations and has been issued with the objective of incentivizing employers to make payment of salary to their employees and comes with the added motivation of avoiding imposition of penalties and interest," Pooja Ramchandani, Partner, Shardul Amarchand Mangaldas & Co said.
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