LIABILITY UNDER ESI

[S.C. WADHWA]

A company employed labour to do painting work. We have not received any challan towards ESI deposited by them. Whether it is duty of company to deposit ESI on behalf of them because the work is carried out in company.

Bill Amount of labour is Rs. 121000/-. In my opinion, the labour have not ESI account.  If company is required to deposit ESI, how same will be calculated.

Please clarify and suggest for future.

[Harish Chander Bhatia]

First: if the company is registered under the ESI , this provision is applicable, the deduction is at the rate of 6.50 percent of the total amount paid. Since none of the employee is registered under ESI , therefore the benefit will not be available to  the contractor's employees

AI Summary

Employer liability under ESI: registered employers must deduct and deposit contributions, while unregistered contractor workers lack ESI benefits.
Liability to account for ESI depends on the company's registration: if the company is registered under ESI it must deduct and deposit the prescribed contribution on the total amount paid to labour/contractor, calculated at the stated rate of 6.50 percent. If the contractor's employees are not individually registered under ESI, those employees will not be entitled to ESI benefits despite the work being carried out for the company.