In Gujarat Gycromat Ltd. vs. APFC, 2004 I CLR 484, the Gujarat High Court has held that all allowances other than House Rent Allowance will be treated as basic wages which will attract provident fund contributions.

In Surya Roshni Ltd. vs. Employees’ Provident Fund, 2011 LLR 568, the Madhya Pradesh High Court has held that transport, washing, special allowances and incentives to all the employees’ wages are to be accounted for provident fund contributions.   The Division Bench of the High Court also in the special appeal has upheld the judgment of the Learned Single Judge.

In Management of Reynolds Pens India Pvt. Ltd., Kancheepuram vs. The Regional Provident Fund Commissioner-II, Chennai, 2011 LLR 876, the Madras High Court has held that conveyance, education, medical, city compensatory and special allowances, food concessions, special holidays, night shift incentive will attract provident fund contributions.

Being aggrieved, not only Surya Roshni [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], some other establishments have filed appeals in the Supreme Court.

Author’s Notes: It is very likely to be held that the allowances other than the House Rent Allowance which are ordinarily, compulsorily and universally paid to the employees by an employer would attract provident fund contributions.


In Assistant Provident Fund Commissioner vs. M/s. G4S Security Services (India) Ltd. & Another, 2011 LLR 943 the Division Bench of Punjab & Haryana High Court has held that Employees’ Provident Fund contributions will not be attracted on house rent allowance, conveyance allowance and washing allowance even when these are part of minimum wages as fixed under the Minimum Wages Act, 1948.

Authors Note: The EPFO has filed an Appeal Civil No.9284/2013 in the Supreme Court which is likely to be listed on 29th April, 2016. (There has been no stay which was not even applied for by the EPFO).

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