Page 111 - DMGT306_MERCANTILE_LAWS_II

Mercantile Laws – II

Notes 6.4.6 Exemption

An establishment/factory may be granted exemption under Section 17 if, (i) in the opinion of
the appropriate government, the rules of its provident fund with respect to the rates of
contributions are not less favourable than those specified in Section 6 of the Act, and (ii) if the
employees are also in enjoyment of other provident fund benefits which on the whole are not
less favourable than the benefits provided under the Act or any scheme in relation to the
employees in any other establishment of a similar character. While recommending to the
appropriate government grant of exemption under this section, the Employees’ Provident Fund
Organisation usually takes into consideration the rate of contribution, the eligibility clause, the
forfeiture clause and the rate of interest. Also, the totality of the benefits provided under the
rules of the exempted funds is taken into consideration.

Example: The Central Government is empowered to grant exemption to any class of and
soda security establishments from the operation of the Act for a specified period, on financial or
other grounds under section 16(2).
The exemption is granted by issue of notification in the Official Gazette and subject to such terms
and conditions as may be specified in the notification. The exemption does not amount to total
exclusion from the provisions of the Act. The exempted establishments are required to constitute
a Board of Trustees according to the rules governing the exemptions to administer the fund,
subject to overall control of the Regional Provident Fund Commissioner. The exempted
establishments are also required to maintain proper accounts, submit prescribed returns, invest
provident fund accumulations in the manner prescribed by the Central Government from time
to time, and to pay inspection charges. Exemption is liable to be cancelled for breach of any of
these conditions.

Self Assessment

Fill in the blanks:
10. The statutory rate of contribution to the provident fund by the employees and the
employers, as prescribed in the Act, is ........................... of the pay of the employees.

11. The nomination form shall be filled in duplicate and one copy duly accepted by the
........................... office will be kept by members.
12. The ........................... establishments are also required to maintain proper accounts, submit
prescribed returns, invest provident fund accumulations in the manner prescribed by the
Central Government from time to time, and to pay inspection charges.

6.5 The Employees’ Deposit-linked Insurance Scheme, 1976

The Central Government may by notification in the Official Gazette frame a Scheme to be called
the Employees’ Deposit-linked Insurance Scheme for the purpose of providing life insurance
benefits to the employees of any establishment or class of establishments to which this Act
applies. There shall be established as soon as may be after the framing of the Insurance Scheme
Deposit-linked Insurance Fund into which shall be paid by the employer from time to time in
respect of every such employee in relation to whom he is the employer such amount not being
more than one per cent of the aggregate of the basic wages dearness allowance and retaining
allowance (if any) for the time being payable in relation to such employee as the Central
Government may by notification in the Official Gazette specify.

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