In pursuance of the EOB (Amendment) Ordinance, 2002 and SRO 500(I)/2002 dated 5^th August 2002, following guidelines are issued for guidance of officers for planning field work.

 A.     REGISTRATION OF EMPLOYERS

 1.     Amnesty Scheme

1.1    The Federal Government in exercise of its powers u/s 46 of the EOB Act, 1976 has promulgated Amnesty Scheme vide SRO No. 500(I)/2002 dated 5^th August 2002. It has exempted the employers and employees from payment of contributions and all other provisions of the Act from the date of applicability to the date of registration of the establishment on submission of declaration in Form No. PR-01A (Annex-I). The last date for submission of application has been fixed as 30^th September, 2002. The scheme provides that those employers shall not be eligible for this concession where any proceeding u/s 11 of the Act had been initiated against them or any of their employees had applied for registration u/s 11(2) of the Act before 1^st July 2002. This exception has been made to protect the right of the employees and insurable persons who got themselves registered u/s 11(2) of the Act.

 1.2    It is now incumbent on officers not to issue new notice for registration till expiry of the last date for amnesty to allow sufficient time to employers to avail the concession.

 1.3    The Zonal and Regional Heads should explain the scheme through meetings with the Employers & Employees Associations, and local chambers of Commerce & Industries to motivate the employers to avail the scheme. However they should also consolidate the data-base expeditiously and compile complete lists of registerable establishments so that after expiry of the time limit for Amnesty Scheme rapid action could be taken against the delinquent employers.

 1.4    A separate register on the format Annex-II should be maintained for keeping the record of the employers who apply for registration under newly introduced Amnesty Scheme. The industries/establishments registered under the said scheme shall be allotted a distinct registration number provided by the EDP Division for instant identification. The progress shall be reported separately in the MPR in the format placed as Annex-III.

 1.5    No case shall be rejected or excluded from purview of the amnesty without approval of the Zonal Head who shall record reasons after seeing the evidence and pass a speaking order in such cases.

2.     New Registration

 2.1    It is reemphasized that no notice for new registration shall be issued till expiry of the amnesty scheme i.e. 30^th September, 2002.  The registerable cases may be identified from the data base already prepared by the Regional Offices. The list should be kept confidential till expiry of last date for amnesty. The Zonal/Regional Heads should visit and hold meetings with the Employers and Employees Associations to explain the purpose and details of the scheme. After expiry of the last date for filling options for Amnesty in PR-10 form a proper action for registration of unregistered employers shall be initiated in accordance with law.

 3.     Self Assessment Scheme

 3.1    In the EOB Act through Section 12A new version of Self Assessment Scheme has been introduced. It is a simplified scheme to encourage voluntary compliance. The optee employer has to file PR-10 Annex-IV form and pay a fix contribution of Rs. 150/-per employee per month as employers’ share. The declaration made by the employers shall be accepted with out any question. However the employers shall not decrease the total amount of contributions and number of insured persons registered immediately prior to opting for the scheme and two years thereafter.

 3.2    This is a liberal and unprecedented scheme where the number of persons declared shall be accepted without any objection by the Institution. It will build confidence and trust between the employers, employees and the Institution. Even if evidence for suppression of contribution is received the law requires that it shall not be used for two years. After two years such evidence can be utilized for cross verification of contribution and number of insured persons for the third year in which one time checking by an officer not below the rank of a Deputy Director shall be permissible. However no question shall be asked for previous two years.

 3.3    In cases where any demand is outstanding against the employer he shall have to pay / settle the outstanding amount before opting for the scheme.

 3.4    A separate register shall be maintained in every Regional Office for recording of Self Assessment cases in the format placed as Annex-V. The progress in filing of PR-10 forms and contribution shall be separately reported in the MPR of every month.

 3.5    The declaration of higher number of insured persons and increased contribution in PR-10 shall not be treated as evidence for revision of earlier years demand u/s 12(3).

B.     RECOVERY OF CONTRIBUTIONS

 4.     Current Collection

 4.1    Standard legal procedure for levy of statutory increase has been enforced through Circular No. 2/2001-02 dated 19/6/2002. Now the employers have been given 45 days time to pay the current contributions. In view of this a list of defaulters of current contributions should be prepared regularly. The demand for statutory increase as provided in the above referred Circular should be raised regularly. After expiry of 3 months action in accordance with the procedure for assessment/recovery of contribution shall be initiated.

5.     Employees’ Collection

 5.1    Special attention should be given to collection of employees’ contribution. When an insured person pays his own share of contribution through PR-03A form on his own initiative, he should be registered under the Act, if he is not already registered. An immediate action for registration should be taken against the employer for registration, if it is not registered. Proceedings must be completed in shortest possible time. Pending cases necessarily be reported to the Head Office through MPRs in the format placed as Annex-VI.

6.     EVASION CASES

 6.1    It is hoped that after availing amnesty and self-assessment scheme there will be very few cases of evasion but it is incumbent on field officers to keep vigilant watch on compliance to identify such cases. The list of such cases should be prepared on the basis of information collected from various sources in the format placed as Annex-VII.

 6.2    In normal cases, not covered by Self-Assessment Scheme, plan for record checking may be prepared specifying the names of units, the evidence of evasion, dates of visits and name of the Assistant Director (format placed as Annex VIII). The inspection cases of new registration should be started immediately after the expiry of the last date for amnesty in cases of registerable units not availing amnesty.

 6.3    In case of evasion in existing cases no checking may be made before 30^th September to give the employers full opportunity to avail self-assessment scheme to make correct declaration of insured persons and contribution.

 7.     DEFAULT IN PAYMENT OF CURRENT CONTRIBUTION

 7.1    Field officers should remain vigilant to pursue recovery in accordance with law even in case of employers paying contribution under Self Assessment Scheme. After expiry of three consecutive months of default, demand notice on the basis of declared number of insured persons and amount of contribution should be issued after passing order u/s 12(3) as per Annex-IX to such employers in accordance with the standardized assessment procedure contained in Circular No. 11 & 12 of 2002-03 both dated 7/8/2002 and action for recovery taken under law.  It may be kept in mind that as per present law no establishment will be ousted from the Self Assessment Scheme by default in payment of contribution and it will remain covered till expiry of the term of two years.

 7.2    For the employers covered under normal Scheme the procedure given in circular 11 & 12/2002-2003 referred to above shall be strictly adhered to. It may be noted that for assessment of the contribution solid evidence should be relied upon. The personal knowledge of any event is not evidence in the eyes of law for the purpose of assessment of contributions. Therefore every effort be made for collection of corroborative evidence. The employer must be confronted with such evidence before drawing any adverse inference to meet the ends of natural justice.

7.3.   For the purpose of effective verification of the books of accounts the Regional Offices shall chalk out a comprehensive plan. That program shall be approved by the respective Zonal Heads. The comprehensive program of visits, inspections and books checking shall be submitted to Head Office by each Region through Zonal Office quarterly in accordance with following schedule.

 ·               Quarter ending September              15^th July.

·               Quarter ending December               15^th September.

·               Quarter ending March                    15^th December.

·               Last quarter ending June                        15^th March.

 7        .4 Quarterly programmes shall be divided into monthly programmes and same shall be provided monthly before start of visits/inspections. The verification program shall be started from October, 2002 for the current year. In the mean times following jobs must be completed:

(i) Constant interaction be made with the Chambers/Employers Associations by the Regional/Zonal Heads.

(ii)   List of defaulters must be prepared and action taken in accordance with law and above noted guidelines.

(iii)   List of registerable establishments be prepared alongwith the evidence for register-ability and kept confidential. A copy may be supplied in a confidential letter to Head Office.

(iv)    A comprehensive record checking plan for remaining year after expiry of amnesty, divided into quarter and months be prepared and sent to the Head office on monthly basis from October onwards on expiry of last date of amnesty.

7.5    The above instructions be followed fairly, judiciously and meticulously to achieve positive results for yourself, the Institution and the country.

 

 

                                                                                   

                                                                                                       (Muhammed Shafi Malik)

                                                                                                                     Chairman