Dear Mr Manish Kumar
In the absence of separate ESI code for the Contractor, as Principal employer - you will have to recover 6.5% on 25% of the Bill amount and remit the same to the ESI authorities. (some case laws mentioned below for your reference).
• When the employer fails to give break up of the amount spent, construction, repair etc., 25% of it will be treated as 'wages' for ESI's contribution purposes.
Shree Sivakami Mills Ltd" Madurai (represented through Managing Director) v ESI Corporation, Madras (through its Regional Director) Madras, 2001 LLR 370 (Mad HC)
• Employees engaged by the contractor in an establishment are liable to be covered under ESI Act.
Employees' State Insurance Corporation v. Vijayamohini Mills, (1990) II LLJ 464: 1990 LLR 305: 1990 (1) LLN 902 (Ker HC).
• The principal employer will be liable to pay the ESI's contributions of the employees employed through contractor.
Standard Fabricators India) (Pvt.) Ltd. v Regional Director, ESI Corporation, Bombay, (1994) 69 FLR 785: 1994 LLR 869 (Bom HC).
• Respondent-company is liable to make contribution at 25 per cent in respect of labour charges of the total cost of the buildings.
Madras High Court - Regional Director, Employees' ... vs Sundaram Clayton Ltd. And Ors. on 10 December, 2003 Equivalent citations: (2004) IILLJ 30 Mad.
N Nataraajhan, Sakthi Management Services (Hp : + 91 94835 17402 ; [Login to view])