Gratuity Liability

Your question looks contradictory as a person becomes eligible to receive gratuity when he has completed 5 years in a company..... and temporary employee cannot be assumed to be employed for a period of five years. In that case he would be a permanent employee so it dont seem correct to provide for Gratuity liability for a temporary employee.

This is not the case.There are lot of factories where employees are kept as  temporary employees and are not automatically converted to being permanent employees.If you search you will find there are lot of companies which have specifically laid down rules as per standing order regarding the temporary employees.However, i was looking for any judgement or specific rules as per the Gratuity Act which specifically lays down rules in this regard

The Payment of Gratuity Act provides for a scheme for the payment of gratuity to all employees in all establishments employing ten or more employees to all types of workers .There is nothing like permanent,probation,temporary,casual etc. for entitlement or non- entitlement of gratuity for an employee. If any person has worked in the capacity of an employee as defined under section 2(e) of the Payment of Gratuity Act,1972 then he become eligible to have gratuity from the employer if he have render five years or more of continuous service with the same employer. Thus he is entitled to have gratuity for his temporary employment also.

What is more important is a CONTINUOUS  service of more than 5  years  ( in fact  4 years and 240 days).

So if you are  giving them breaks regularly  then it is not a continuous service, hence these provisions are not applicable to them.