TeamLease Services Limited has filed an appeal with the Hon'ble High Court of Gujarat against an order issued by the Employees' Provident Fund Organisation (EPFO), Ministry of Labour and Employment, Government of India. The appeal was filed on May 06, 2026, pursuant to a disclosure made under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The filing was signed and submitted by Alaka Chanda, Company Secretary and Compliance Officer.

Background of the EPFO Order

The EPFO order in question was issued under Para 26B of the Employees' Provident Fund Scheme, 1952, and is dated March 11, 2026. It was issued by the Regional Provident Fund Commissioner, Vadodara, and pertains to TeamLease Skills University (TLSU) — India's first vocational education and training university, established in Gujarat in 2013 under the Gujarat Private Universities Act, 2009, as a Public-Private Partnership with the Government of Gujarat. TeamLease Foundation (formerly known as TeamLease Education Foundation), a subsidiary of TeamLease Services Limited, acts as the sponsoring body of TLSU.

The key details of the regulatory action are summarised below:

Nature of the Dispute

The core dispute revolves around whether NEEM (National Employability Enhancement Mission) trainees deployed by TLSU to various client locations should be classified as "employees" under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. The NEEM scheme was launched by the Department of Higher Education, Ministry of Education, under the All India Council of Technical Education, dated April 15, 2013. As per the amended NEEM Guidelines dated June 15, 2017, trainees under this scheme are expressly excluded from being treated as employees for the purposes of statutory social security legislations, including Provident Fund and Employee State Insurance.

The relevant clause of the NEEM Guidelines states:

"Remuneration/Stipend shall be paid as a single consolidated amount and such payment will not attract any statutory deductions or payments applicable to regular employees i.e. PF/ESI etc., since the NEEM contract assures training and does not constitute employment."

The EPFO authorities, however, have taken the view that NEEM trainees should be treated as "employees" under the EPF Act. Initially, proceedings were proposed under Section 7A of the EPF Act, which pertains to assessment and determination of Provident Fund dues. Following TLSU's representation that applicability of the EPF Act itself needed to be determined first, proceedings were subsequently initiated under Para 26B of the EPF Scheme, 1952, which specifically deals with the determination of applicability.

Financial Impact and Contingent Liability

The EPFO order under Para 26B is limited to determining applicability and does not quantify any provident fund dues, interest, damages, or financial liability. Accordingly, the company has stated that there is no immediate or ascertainable financial impact as on date. The matter has been disclosed as a contingent liability under Note 46.7 in the consolidated financial statements for FY25.

The company also noted that since the order was received prior to the SEBI amendment dated June 14, 2023 — which mandated intimation to stock exchanges upon receipt of any demand order or notice — no earlier disclosure was made. The current disclosure is being made in connection with the filing of the appeal before the High Court.

Appeal and Legal Proceedings

TLSU has challenged the EPFO order before the Hon'ble High Court of Gujarat and will be seeking an appropriate stay on the operation of the order. The company cited a precedent in its favour: in a similar matter relating exclusively to NEEM trainees, TLSU had earlier obtained a favourable interim stay from the Hon'ble High Court of Madras. Given that the present case rests on identical facts relating to the NEEM Scheme, the company has stated it is optimistic of obtaining similar relief.

TeamLease Services Limited has stated that it remains committed to ensuring full compliance with applicable laws and regulatory requirements and will keep the stock exchanges duly informed of any material developments in this matter.

Source: None/Company/INE985S01024/1eb032074e244520.pdf

TeamLease Services has informed the stock exchanges regarding the receipt of an Order-in-Appeal from the Commissioner of CGST & Central Excise (Appeals-III), Mumbai. The disclosure, made on May 06, 2026, pertains to a penalty imposed under the Central Goods and Services Tax Act, 2017, and was filed in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Background of the Order

The order arises from proceedings initiated by the Directorate General of GST Intelligence. The authorities alleged that the company issued invoices without an underlying supply of services in respect of manpower services rendered during the period from July 2017 to July 2022. Consequently, a penalty was imposed under Section 122(1)(ii) read with Section 74 of the CGST Act, 2017.

TeamLease Services has contested these allegations, stating that it duly rendered the manpower services, issued valid GST invoices, and processed payment of salaries with applicable statutory deductions. The company maintains that it discharged the requisite GST and that all transactions were appropriately reported in statutory returns and reflected in financial statements. The company further noted that the impugned order suffers from significant jurisdictional and legal infirmities, including violation of the principles of natural justice, non-consideration of material evidence, and summary disposal of multiple appeals through a common order. Additionally, a similar case re-opened under Section 147 of the Income Tax Act, 1961, for FY2019 to FY2022, was closed with NIL observations after the department found all records and transactions in order.

Financial Implications and Legal Response

The Order-in-Appeal has resulted in the upholding of a penalty of approximately Rs. 32.29 Crores. While no tax demand has been raised, the company stated there is no material impact on operations at this stage. The matter had previously been disclosed as a contingent liability under Note 46(f) in the standalone financial statements for FY25.

In response to the order, TeamLease Services is in the process of filing a writ petition before the Hon'ble High Court of Karnataka, Bengaluru, challenging the Order-in-Appeal. The company will seek appropriate interim relief, including a stay against recovery proceedings.

Key Details of the Order

The following table summarises the key particulars of the Order-in-Appeal as disclosed to the stock exchanges:

Disclosure Delay and Compliance Commitment

The company clarified that the delay in disclosure was due to an initial management decision to report the matter as a contingent liability in the standalone financial statements, given that there was no financial impact at the time the demand notices were received. Following internal discussions and a revised understanding of regulatory requirements, the company has committed to disclosing all Demand and Show Cause Notices based on materiality thresholds within prescribed timelines, irrespective of whether they are disclosed under contingent liability or carry no immediate financial impact. TeamLease Services reaffirmed its commitment to full compliance with applicable laws and regulatory requirements and stated it will keep stock exchanges and regulatory authorities duly informed of any material developments in this matter.