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Affected by cash crunch due to the COVID-19 pandemic, businesses will get the flexibility in filing monthly Electronic-Challan cum Return (ECR) and payment of the statutory contributions separately under the Employee Provident Fund (EPF) Scheme.
Change in norms is likely to benefit 6 lakh establishments and 5 crore employees.
At present, businesses have to file ECR and pay the dues within 15 days from the end of month. Dues meanemployee’s share (12 per cent of basic plus dearness allowance) and matching contribution by the employer. For the wage month of March, the government relaxed the norm and allowed the businesses to file ECR and deposit the dues by May 15 as against originally scheduled date of April 15
Now, the government has further eased the compliance procedure by separating the monthly ECR filing from the payment of the statutory contributions. ECR is an electronic monthly return to be uploaded by the employers on a portal. The return has member-wise details of the wages and contributions; including basic details for the new and existing members (members who have joined or have left service in the wage month for which the return is uploaded).
The approval of uploaded ECR results in the generation of a Challan by which the employer has to remit the dues in the designated banks.
According to a Labour Ministry, in the current scenario of lockdown announced by the government to control the spread of COVID-19 pandemic and other disruptions, the businesses and enterprises are not able to function normally and are facing liquidity crunch to pay their statutory dues even though they are retaining the employees on their rolls. “The ECR can now onwards be filed by an employer without the need of simultaneous payment of contributions and contributions may be paid later by the employer after filing the ECR,” the statement said.
This change will entail convenience to the employers as well as the employees covered under the Act and Schemes. ECR filing by the employer in time is indicative of employer’s intent to comply and will not, therefore, attract penal consequences if the dues are paid within the extended time.
Filing of ECR in time will help in credit of employer’s and employee’s share of contributions, totalling 24 per cent of wages by the Central government in EPF accounts of low wage earners in establishments eligible under Pradhan Mantri Garib Kalyan Yojana package.
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