Guidance on PF/ESIC Registration for Small Contractors
I am a proprietor working as a contractor, primarily on construction and interior sites. My work scope is not continuous at any single site. I receive work orders on a per-square-foot rate basis plus service tax, usually concluding within a week, sometimes even in one to two days. I do not supply any material. I have employed eight people for this work, and their average monthly payment is approximately Rs. 23,000/- inclusive of traveling allowance. I have taken a Workmen's Compensation policy.
Recently, most developers, builders, and interior contractors have started insisting on providing PF/ESIC registration details and monthly payment challan copies.
Please guide me on whether registration under PF/ESIC is applicable to me. I have tried to convince them that both PF and ESIC are not applicable to me, as the number of employees employed by me and the payment made to them are beyond the limits prescribed by PF/ESIC. However, I have started losing my orders as I am unable to provide the required registration details to them.
In such a scenario, what are the options available to me? Is there any provision for small contractors like me? Is it mandatory for me to take registration? Is there any exemption that I can avail? Is there any composite scheme wherein I can pay a certain amount per employee?
Please guide.
Regards,
S. M. Balaji
From India, Mumbai
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I am a proprietor working as a contractor, primarily on construction and interior sites. My work scope is not continuous at any single site. I receive work orders on a per-square-foot rate basis plus service tax, usually concluding within a week, sometimes even in one to two days. I do not supply any material. I have employed eight people for this work, and their average monthly payment is approximately Rs. 23,000/- inclusive of traveling allowance. I have taken a Workmen's Compensation policy.
Recently, most developers, builders, and interior contractors have started insisting on providing PF/ESIC registration details and monthly payment challan copies.
Please guide me on whether registration under PF/ESIC is applicable to me. I have tried to convince them that both PF and ESIC are not applicable to me, as the number of employees employed by me and the payment made to them are beyond the limits prescribed by PF/ESIC. However, I have started losing my orders as I am unable to provide the required registration details to them.
In such a scenario, what are the options available to me? Is there any provision for small contractors like me? Is it mandatory for me to take registration? Is there any exemption that I can avail? Is there any composite scheme wherein I can pay a certain amount per employee?
Please guide.
Regards,
S. M. Balaji
From India, Mumbai
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In case of a works contract, if the contractor does not provide the ESIC/EPF details, then the principal will deduct the same from bills and pay the department. If you wish to continue the registration and contribution, there are many ways to make compliance less of a hassle.
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Thanks for the reply.
However, I am not engaged in a works contract. It is purely a labor contract based on square feet rates.
Moreover, the question is whether it is mandatory for me to register under PF/ESIC considering the number of employees I have and their pay scales. If not, then how do I claim exemption?
From India, Mumbai
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However, I am not engaged in a works contract. It is purely a labor contract based on square feet rates.
Moreover, the question is whether it is mandatory for me to register under PF/ESIC considering the number of employees I have and their pay scales. If not, then how do I claim exemption?
From India, Mumbai
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As the principal is registered under ESIC/EPF, they are liable for payment of ESIC/EPF for the workers engaged in their work, directly or through any contractor. Therefore, you need to get yourself registered under the respective acts on a voluntary basis. Ask for Form V from the principal first when they raise such queries. Subsequently, you have to get yourself registered under CLRA, then ESIC, and finally EPF.
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