The Supreme Court has given a landmark judgment on 08/03/2021 that Conveyance Allowance given in any form shall not be included for the purpose of ESI Contribution (ESIC Vs. Texmo Industries). Based on this judgment, ESI Corporation has released a circular dated 08/11/2021 stating that Conveyance Allowance need not be taken for the purpose of ESI contribution and this holds good effective from 08/03/2021. Consequent to this, following are some of the queries which need clarifications:
a) Should Conveyance Allowance be included for the purpose of coverage and be excluded only for contribution?
b) If Conveyance Allowance is given as a fixed amount to all employees, can it be excluded for both?
c) Since it comes into effect from 8th March, would ESIC permit us to adjust the excess contribution paid on Conveyance Allowance from 8th March to 31st Oct 2021? Or will it be refunded to the employer?
d) What will be the status of the pending cases on inclusion of Conveyance Allowance for payment of contribution? Will they still be tried in the Courts?
Regards, Ranganathan RS
a) Should Conveyance Allowance be included for the purpose of coverage and be excluded only for contribution?
b) If Conveyance Allowance is given as a fixed amount to all employees, can it be excluded for both?
c) Since it comes into effect from 8th March, would ESIC permit us to adjust the excess contribution paid on Conveyance Allowance from 8th March to 31st Oct 2021? Or will it be refunded to the employer?
d) What will be the status of the pending cases on inclusion of Conveyance Allowance for payment of contribution? Will they still be tried in the Courts?
Regards, Ranganathan RS