Subrato Banerjee
Service, Manager- Hr
Private Service (managar Hr)
Vishwajeet Singh
Hr Professional

Dear All,
Recently an ESI inspection was carried out in my organization and he checked all the details required including Annual report and from report he picked up few heads like repair and maintainance, services charges, technical & consultancy services, legal and professional expense, management fee, miscellaneous expenses.
can any one help me out that what are the areas where we have to make compliances under the act.
With Regards

From India, New Delhi
Mr. Naseem You have to go perssonally to meet the ESI PRO. They will explain you all the matter regarding ESI inspection.
From India, Gurgaon
Dear Naseem
ESI Inspector cheked the documents as you mentioned, because he will frame charge and calculate the dues on the basis of annual report, because in ESI all contractors , engagged in the organisation, whether the contract was given inside or outside for any kind of work, the organisation has to deduct the ESI @4.75 & 1.75 and remitt it into ESI accounts of the contractor, if contractor don;t have their own ESI account , the company can remitt the same in company;s ESI Code, and for outside work given to any party you can deduct ESI on 25% of the Bill amount.
Pl.feel free to email me on

From India, Thana
Dear Naseem,
Make sure once you employ any Contractor that they have ESI Code. Also check their challan to verify that ESI is being deposited on a regular basis. For the uncoded contractor if any, ask them to break the bill into Material & Labour Cost. Deduct 6.5 % on the labour cost and deposit the amount through challan. You must write on the top of the Challan the Contractor's name for future reference as also should write on the bill that ESI has been deducted.
Also note that no ESI needs to be deducted if the work has been performed outside the factory premises.

Dear Subrato,
Are you sure that person working outside the factory primisses are not required for payment of any kind of ESI contribution, if so please pass me any reference in respect to this.

Only in the case where the employer has direct Supervision of jobs , ESI is payable. If you can prove to the ESI Inspector that the job was done outside the factory premises without any supervision of the Mangement you will not be liable to pay ESI. However, you must keep the proof of say Gate Pass etc. to authenticate your statement. I am very sure of what I am saying as I have attended lot many hearings. However, if you still have any doubt you may consult ESI Inspector of your area.

ESI deduction neither depend whether job supervise by principal employer or work going on with in or out side factory. ESI is not applicable only green field projects. If an establishment covered under ESIC then all worker whether regular/contractual should cover under this scheme subject to salary limit.

From India, Delhi
Please take the details from the below link,,

From India, Coimbatore
I am not in agreement with Mr Subarto.
Whether the activity is done inside or outside, ESI wil be applicable.
Example of a manufacturing industry
1. Manufacturing unit is covered unbder ESI
2. They sub contract work to a third party.
3. The above said subcontractor has his own factory and does work for many principals, he needs to get ESI for his factory
4. If the above siad vendor is exclusivley carrying out work for thius unit, then the onus lies on the Principal that he covers all his emploiyees.
There are many similar situations which can be answered based on thuis priciple

From India, Chennai
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