What is statutory requirement? Its importance / disadvantage

What is statutory requirement? Its importance / disadvantage.

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What is statutory requirement? Its importance / disadvantage
What is statutory requirement? Its importance / disadvantage

In this blog we will cover the below content:

  • What is statutory requirement? Its importance / disadvantage
  • key terms related to statutory requirement:
  • Definition of Statutory Compliance
  • Why is it important?
  • Importance of compliance of statutory requirement:
  • Disadvantages of non-compliance of statutory requirement:

Examples of statutory requirement:

Requirement of IATF for statutory requirement:

Hope in the end of this blog you will be confidently able to answers above question. So lets discuss above content one by one.

So enjoy the session. Have a good day

 

What is statutory requirement:

The term statutory means “related to statutes”- something related to rules and regulations in respect of any product or commodity.

 

It means statutory is related to requirement which are related to any rule and regulation , it means some kind of mandatory requirement which ih an organization have to full fill their requirement to run the business smoothly in case of violation or noncompliance of statutory requirement a heavy penalty have to pay to authority.

Key terms related to statutory requirement:

First we have to understand the key terms related to statutory requirement:

Compliance : It is define as the action which are taken by any organization to fulfil the requirement or we can say to meet the requirements.

Non compliance :

It is defined as the situation which shows there is no action can decided by organization to meet the requirement from rule or legal requirement.

It shows that organization is not following the rule or any other requirement.

And we know non compliance of any rule causes heavy panelty from authority.

Definition of Statutory Compliance:

 

The definition of satutatory compliance is same as usual that the rule or any other pegal requirement the rule or requirement Beach rules and requirements. Are depend on. Functions. or we can process of organisation. the key requirements related to legal’s all payroll taxation, safety regulation, various rules and act specific To state as well as centre.

 

Few of the example fore Human Resources definition (payroll and taxation), statutory compliance is the legal structure within which a company must conduct itself with regards to the treatment of its employees.

 

Why is it important?

As we know the statutory requirement are very important to comply by an organization to run the organization smoothly .Because if any organization is not following the compliance of statutory requirement it will leads to penalty from authority which can create disruption in business. So it’s very important to compliance of statutory requirement .

 

Importance of statutory requirement:

below are the key importance of statutory requirement compliance:

  • Compliance of statutory requirement build confidence of customer on organization.
  • It help to run smooth each and every function of organization.
  • It help to build a brand image.
  • It helps to create customer base
  • It helps to catch the business opportunities in world wide.

 

It shows the dedication and directives of management towards statutory requirement.

Disadvantages of non-compliance of statutory requirement:

As we know non-compliance of statutory requirement it will result in penalty from authority but some tine the noncompliance is exceed the level of acceptance or we can say negotiation as per rules in that scenarios it can also leads to closure of organization: here are few of drawbacks of non-compliance of statutory:

 

  • It can leads to penalty from authority
  • It increase customer dissatisfaction
  • In can leads to penalty from customer
  • Penalty from filed failure.
  • It create bad image of organization in society and market

 

Examples of statutory requirement:

Some of the rules and regulation are listed below:

The following are some labour Acts in India that require a list of company statutory compliance:

  • The Workmen’s Compensation Act, 1923
  • The Trade Unions Act, 1926
  • The Payment of Wages Act, 1936
  • The Industrial Employment Standing Orders Act, 1946
  • The Industrial Disputes Act, 1946
  • The Employees’ State Insurance Act, 1948
  • The Minimum Wages Act, 1948
  • The Factories Act, 1948

 

Requirement of IATF for statutory requirement:

 

As we know IATF is International standard for automotive industry which provide the information about the defined requirement for implementation the well-established system to fulfil the customer requirement without any failure.

 

IATF 16949 is major focus on requirement related to statutory requirement that’s why a specific clause number is given to implement requirement for statutory requirement:

 

Which hare mentioned below:

As per IATF standard a clause number 8.4.2.2 named as Statutory and regulatory requirements

8.4.2.2 Statutory and regulatory requirements

 

In this clause IATF mentioned key requirement which his mandatory for organisation to comply to achieve high level of satisfaction of customer.c a

Below are the key requirement

 

These all are shall requirement so organisation must implement these otherwise it will leads to non-conformity in eternal audit.

  • Organization have make a document for process
  • Process to ensure that purchased products, processes, and services which are being used by organisation are
  • Conform to the current applicable statutory and regulatory requirements as per applicability
  • These are applicable to country where shipment is being receipt, and country where it is being shipment and the customer identified country of destination as per applicability.
  • It is applicable to all items as per customer information

 

Organization have to follow and implement all control which is defined by customer based on product applicability with respect to statutory and regulatory requirements,

 

All these requirement have to communicate to all members of supply chain, supplier etc. and organisation have to ensure implementation of these control at supplier end also.

 

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What is statutory requirement? Its importance / disadvantage.

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