Dear Friends,
The question is asked where it is written in the Act on non liability of ESI Contribution by employer in non-implemented area.
My say on it, as under:
Please read section 1(3) carefully. According to this section, the provisions of ESI Act are made applicable in the first instance to the employees of the factories covered under this Act by virtue of their location of areas where the Central Government has implemented the provisions of the Act through a Gazette Notification.
Thus, once the Act is implemented in a given area through a Gazette Notification, then the provisions of the Act are applicable to all factories located in this area. Thereby the employer is liable to cover the eligible employees as IP under the Act and make deduction of contribution from their salary and remit it along with his share.
This is implied that when there is no such Notification for any area, the employer in that area is not liable to cover any employee as IP and make deduction of contribution from their salary and pay any remittance.
For applicability of the Act other than to factories, please read section 1(5).
Hope I made it clear as to the point.