ESI INTEREST AND DAMAGE FOR LATE PAYMENT as PF-
EMPLOYEES STATE INSURANCE CORPORATION
PANCHDEEP BHAWAN CIG ROAD NEW DELHI
No. T-11/13/8/2001 Rev. I Dated: 8.2005
Sub: Reduction in rate of interest payable for delayed payment of contribution � Amendment of Reg. 31-A of ESI (Genl.) Regulations, 1950.
Sub-Section (5) of Section 39 of the ESI Act 1948 provides that if any contribution payable under this Act is not paid by the Principal Employer on the date on which such contribution has become due, he shall be liable to pay simple interest @12% per annum or at such higher rate as may be specified in the Regulations, till the date of its actual payment.
Provided that higher interest specified in the Regulations shall not exceed the lending rate of interest charged by any scheduled bank.
The interest rate on commercial advances is fluctuating. The rate of interest being charged by the ESI Corporation on delayed payment of contribution is, therefore, more than the rate of interest being charged for commercial advances as well as lending rate of interest charged by the scheduled banks.
Now it has been decided by the Corporation that an employer who fails to pay contribution within the periods specified in Regulation-31 shall be liable to pay simple interest @12% per annum in respect of each day of default or delay in payment of contribution. In this connection, a proviso to Reg. 31 of the ESI (Genl.) Reg. 1950 has been added and notified in the Gazette of India, Part III, Section 4 vide letter No. N-12/13/1/2005 P&D dated 6.7.2005 effective from 1.10.2005.
� In Regulation 31-A of the ESI (General) Reg. 1950, the words �15% shall be substituted by the words �12%�.
The above notification was circulated vide Hqrs. letter No. N-12/13/1/2005 P&D dated 12.8.2005.
It is, therefore, requested that on all delayed payments of contribution, the interest may be charged @ 12% per annum with effect from 1.10.2005.
This issues with the approval of Insurance Commissioner.
Please acknowledge receipt.
Hindi version will follow.
(V.V.S.P. Ramachandra Rao)
JOINT DIRECTOR (Rev.)
The Regional Director/Director/ Joint Director I/c
Regional Office/Sub-Regional Office
All Joint Director (F)/Dy. Director (F), RO/SRO _________________
Joint Director (Vig.) NZ/SZ/WZ/EZ
All Officers at Hqrs. office.
All Branches at Hqrs. office.
JOINT DIRECTOR (Rev.)
# No.of days delayed in making payment x 5% p.a (Less than 2 months)
# No.of days delayed in making payment x 10% p.a (2 months and above but less than 4 months)
# No.of days delayed in making payment x 15% p.a (4 months and above but less than 6 months)
# No.of days delayed in making payment x 25% p.a (6 months and above)
7th February 2013 From India, Kota