TCS - Coverage under the Provident Fund Act

Tata Consultancy Services Ltd (TCS) has announced that the Bombay High Court has, vide its Order dated September 20, 2006, issued on October 05, 2006, decided the case in favour of the Company and has held that the Company is not, covered under the PF Act as an establishment rendering "expert services" in terms of the May 1971 Notification.

The Company has its own Provident Fund which is recognized under the Income Tax Act, 1961, and its employees are members of the same. Pursuant to a Notification of the Central Government dated July 27, 2006, which specifically covers the Information Technology industry under the PF Act, the Company is seeking from the Provident Fund authorities, coverage and exemption to its existing Provident Fund under the PF Act.

Further the Company has informed that, the Regional Provident Fund Commissioner (RPFC) had in the past issued an Order covering the erstwhile Company's Division under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (the "PF Act") as an establishment rendering "expert services" in terms of a Notification issued by the Central Government in May 1971. A Writ Petition challenging this Order of the RPFC was filed by the Company before the Hon’ble High Court of Judicature at Bombay. The provision made by the Company in its books on this score aggregates Rs 47.8 crores as on September 30, 2006.

Source : Equity Bulls

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