Hi, If a company stops manufacturing and engages in trading can it just stop filing it’s ESIC returns or it needs to intimate the Esic Department ?

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Dinesh Divekar

Dear Anil,
The subscription to the ESIC depends on the number of employees and not on the type of business activity. Suppose you were to do trading all along even then also ESI was applicable to your company. Therefore, please confirm what is the strength of the employees?
Going further, you may note that when the company registers for the ESI and over a period of time the number of employees reduces to such a level where payment of ESI is not mandatory. However, even then also the company has to remit the ESI contributions. In such a case, reduction of the strength is not an applicable criterion.
Lastly, if your company has shifted from manufacturing to trading only then better to change the labour license. Earlier you must have registered under the Factory Act. With the change in business activity, you need to register under the Shops and Establishment Act. This is also important.
Dinesh Divekar

From India, Bangalore

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