ESI On Labour Charges

Hi All,
As ESI has started with online system generated challan payment. We are facing one problem. In our company, what we do is hire contractor for carpentry work, call for repair work, etc on which labour charges are charged. As such we used to deduct 6.5 % ESIC on labour charges and pay to ESIC monthly showing it as others. But since it is become online and one challan is to be used. Can any one tell me, now how do we pay this amount through system generated challan?
Thanks & regards
Shivani

You have to register the carpenter first putting his details and then get insurance number allotted failing which you can not generate challan and make payment. If you delay on the issue of carpenter you may not be able to pay the challan in time (already it is late ) and the result will be that you will be forced to pay interest and damages. Prosecution may also be there. Therefore, you generate challan as usual and make the payment. Then register the carpenter and generate another challan as supplementary challan and make separate payment for the time being. I am not sure if once a challan is generated the system will block it for the month. Please try that because I have not done the clerical side of it
Regards,
Madhu.T.K

Mr. Madhu,
Thank you for quick reply. My further query is that we hire these small contractors for carpentry, TV repair, etc who hire 2 -3 persons to complete the work. These contractor are hired number of times in a year. The work may be for 1 or 2 day or more in a month. And every month we may find new persons hired by them. In such cases, if we register each person under the contractor, company will end up having so many persons in the system under its head. If so, we would also have to maintain their wage registers although work for 1/more days in a month. Kindly guide me.
Thanks & regards
Shivani

There are so many practical difficulties associated with the system. But, if you follow law systematically, you will have to register N number of so called casual workers. If you want to do it for the sake of compliance only, you can name one or two workers who are expected to come regularly and contribute ESI on their account only. You can also think of bringing these workers under a contractor who has independent ESI/EPF numbers. If so, you need not worry about their statutory things and clerical work involved in it. You just ensure that the contractor is fulfilling the obligations as a contractor.
Regards,
Madhu.T.K

We are also facing same problem.The online sytem is head ache
for companies who having contractors.either the contractor has
to have the code and he has to maintain it.else the principle employer
has to bare it.its a very time consuming process too.
Rajeev Dixit
(09164560076)

Hi All
In ESIC, Interest and damages is applicable on labourcharges?
If Interest and damages is not applicable, please send me the notification..
Thanks..

For all delayed payments towards ESI scheme, interests and damages will be applicable at the prescribed rates. No notification is required for that, you have just to follow the ESI (General) Regulations. See Regulation 31-A, 31-B and 31-C.
Regards,
Madhu.T.K

hi
i have clarifications esi payment kindly advise.
our company has salary cycle from 26 to 25 for every month. hence 2017 onwards management decide to change the payment cycle. 1st 31st as calendar month.
now thye are asking me to clear the statutory payment til 25 to till 31st 6days payment. so i am not able to genrate the supplymentraty challan for ESI.
kindly request you to guidem me the procedure

Your wages cycle is from 26th to 25th of the following month. This does not mean that your wage period is from 26th to 25th. For your convenience of preparing the salary sheet and making the payment on the first of every month you have adopted this as your pay calculation cycle. In fact, your period should be the same, ie, 1st to 31st. If so, you should have given the salary of December till 31st, though you have taken attendance till 25th. And when you take this month's attendance take it till 31st and work it out. If any person had taken leave without pay during 26th to 31st of december, take it in this month and process the salary.
Madhu.T.K