Hello Everyone, I had a query with respect to ESI Contribution rates.
As per the 2019 notification, ESI Contribution rates were reduced to 4% (3.25 for Employer & 0.75 for Worker). The notification changed a specific section 51 of the ESIC Act.
The query is with respect to one of our establishment being notified as a "New Area" under ESIC in January 2019 & other notified as "New Area" in Aug 2020.
Will these areas attract reduced contribution rates of (3.25 & 0.75) or continue to attract the existing rates (3 & 1) as per the 2016 ESIC Notification. Pls, help.
From India, Bangalore
As per the 2019 notification, ESI Contribution rates were reduced to 4% (3.25 for Employer & 0.75 for Worker). The notification changed a specific section 51 of the ESIC Act.
The query is with respect to one of our establishment being notified as a "New Area" under ESIC in January 2019 & other notified as "New Area" in Aug 2020.
Will these areas attract reduced contribution rates of (3.25 & 0.75) or continue to attract the existing rates (3 & 1) as per the 2016 ESIC Notification. Pls, help.
From India, Bangalore
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Dear Prakhar Pandey,
ESIC contribution rate for newly implemented area of 1% employees share and 3% employers share under rule 51-B stands terminated from 01 Aug 2018 by ESI Corporation.
Effective from 01.07.2019 onwards rates of ESI contribution have been reduced to 0.75% employee share and 3.25% employer share.
From India, Mumbai
183ESIC contribution rate for newly implemented area of 1% employees share and 3% employers share under rule 51-B stands terminated from 01 Aug 2018 by ESI Corporation.
Effective from 01.07.2019 onwards rates of ESI contribution have been reduced to 0.75% employee share and 3.25% employer share.
From India, Mumbai
@Akhil Bhartiya, Thanks for your response. It will be of great help if you can share a circular from ESIC regarding the termination of the same. i can only find the 2016 notification online. Thanks.
From India, Bangalore
From India, Bangalore
Dear Prakhar Pandey,
PFA:
1. Gazette notification dated 06.10.2016 pertaining to reduction of ESI contribution rates in newly implemented area; and
2. Circular dated 13.02.2017 giving clarification on the reduction of ESI contribution rates in newly implemented area.
This reduced rates were applicable for 2 years up to 06.10.2018. This clarification is given in the said circular dated 13.02.2017.
From India, Mumbai
PFA:
1. Gazette notification dated 06.10.2016 pertaining to reduction of ESI contribution rates in newly implemented area; and
2. Circular dated 13.02.2017 giving clarification on the reduction of ESI contribution rates in newly implemented area.
This reduced rates were applicable for 2 years up to 06.10.2018. This clarification is given in the said circular dated 13.02.2017.
From India, Mumbai
Thank you Sir... As much as i can undertand from the 2017 clarification, New Area rates are applicable w.e.f. 06.10.2016 for a period of 2 years. That means upto 05.10.2018 only.
So even if any establishment gets notified as New Area on 01.01.2018, it will get the benefit of reduced rates (as per 2016) only till 05.10.2018 & not for 2 years starting from 01.01.2018.
From India, Bangalore
So even if any establishment gets notified as New Area on 01.01.2018, it will get the benefit of reduced rates (as per 2016) only till 05.10.2018 & not for 2 years starting from 01.01.2018.
From India, Bangalore
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ESIC-Contributi on-Transfer-For m.pdf