EPFO not liable to pay service tax on statutory activities performed in terms of EPM & MP Act, 1952

Employees Provident Fund Organization Vs Office of Commissioner of Service Tax  (CESTAT Delhi)

CESTAT Delhi held that Employees Provident Fund Organization (EPFO) is not liable to pay service tax on their statutory activities performed in terms of ‘The Employees’ Provident Fund and Miscellaneous Provisions Act, 1952’ (EPM & MP Act, 1952).

Facts- The appellant is a statutory body under the Ministry of Labour and Employment, Government of India. It has been established by an Act of Parliament called “The Employees’ Provident Fund and Miscellaneous Provisions Act, 1952”.

The case of the appellant is that it enforces the provisions of the Act and Schemes on the establishments covered under the said Act. It collects the contribution made by employees and employers and invests the same in the best possible manner as per the pattern prescribed by the Central Government under section 20 of Indian Trust Act, 1882. The appellant tries to earn the maximum possible earnings on such investments and credits back the earnings in the accounts of employees.

In the course of carrying out the above stated activities, the appellant receives administration charges, inspection charges, 7Q Interest, and penal damages from the employees.

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