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CAG Report Reveals Excess PF Deposit by CIL

Coal News - Published on Fri, 06 Dec 2019

Image Source: noticebard.com
ET reported that India’s Comptroller and Auditor General has pulled up Coal India for making an excess contribution of INR 371 crore to its provident fund body unlawfully for five years till 2018. The national auditor has pointed out in a recent report that Coal India and its subsidiaries deposited the sum with the Coal Mines Provident Fund Organisation as an employer’s share of provident fund contribution on leave encashment, though this was not permissible under law. They said “The practice was not stopped despite a Supreme Court order dated March 2008 in another civil case and despite highlighting the same in the C&AG’s Audit Report of 2009-10.”

A senior Coal India executive, however, argued that the practice was stopped after CAG pointed out the issue.

Coal India deposits retirement benefits with CMPFO that is matched by the employee contribution every month. It is used by CMPFO to pay a lump sum on retirement and disburse the monthly pension to the staff. It is a standard practice in public sector companies for employees to opt for cash in lieu of accrued leave. This being an income, the employer deducts a portion and deposits it with the CMPFO as part of retirement benefit. The Supreme Court ruling mentioned that the basic wage was never intended to include amounts received for leave encashment and directed that if any payment has been made, then it can be adjusted for future liabilities. According to CAG, even after a clarification by the CMPFO commissioner in July 2016, no action was taken by Coal India till November 2017 to discontinue the practice. Coal India subsequently instructed its subsidiaries for discontinuing the practice.

Source :

Posted By : Rabi Wangkhem on Fri, 06 Dec 2019
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