Facing ESI Inspection Challenges: How to Handle Rejected Repair and Freight Explanations?

Dear Folks, Recently, our company was inspected by ESI, asking the following queries from the Profit & Loss Account of 2017-2018. We accounted for Rs. 6000 as freight charges and Rs. 5000 as repair maintenance. We have shown the bills and explained (explanation given below), which were not accepted by the ESI officer. The next hearing may be by this weekend.

Explanation and queries are as follows:

1. Repair Maintenance: After showing the bill copy of the computer service provider for Tally software, ESI asked to produce the ESI registration number, where only three members are working. It is not possible to get the registration number, I replied.

2. Freight Charges: ESI asked why we engaged manpower for loading and unloading. I replied that the manpower was provided by our customer and we offered the amount to them on a humanitarian basis.

Kindly refer to the above information and confirm if both answers were correct. I am seeking further advice on this matter.

Thank you.

Point 1: Repair and maintenance of computers (Tally software)

If the establishment can prove that the service provider did not attend in person but provided electronic support for maintenance, then it may be accepted.

Point 2: Loading and unloading charges

When the manpower was provided by your customer, then you don't have to pay them. Instead, you can offer some food and beverages to the persons, not as wages for loading/unloading. A wrong accounting policy has been adopted here.

Look at your vouchers and then ask the counsel to handle the issue properly.