ESI Return filing

Employee's State Insurance (ESI) is a self-financing social security and health insurance scheme for Indian workers. It is regulated by ESI Act, 1948, Rules, Scheme and Regulations made thereunder. The ESI fund is managed by the ESI Corporation (ESI) according to rules and regulations stipulated therein the ESI Act 1948 which oversees the provision of medical and cash benefits to the employees and their family through its large network of branch offices, dispensaries and hospitals throughout India. ESI is an autonomous corporation under Ministry of Labour and Employment, Government of India. All employers having 10 or more employees are required to be registered with Employee State Insurance (ESI) Corporation. Those entities having ESI Registration must then file ESI returns. All employees earning Rs. 21,000 or less per month as wages are covered under this ESI. Following compliance are applicable on the establishment registered under ESI:

• A Registered Employer is required to file monthly ESI return and pay contributions in respect of coverable employee within 15 days of the last day of the calendar month in which the contributions fall due;

• Provided that where a factory/establishment is permanently closed, the employer shall pay contribution on the last day of its closure;

• Provided that an employer may opt, in such manner as may be prescribed, by the Director General for payment of amount in advance towards contribution to be adjusted against contributions payable by him (including employees’ contribution) for a wage period so that the balance of advance amount continues to be more than the contributions due and payable at the end of the concerned wage period. Such an employer shall furnish in the prescribed pro forma Form 5-A, a six monthly statement of contributions payable and paid in advance with the balance left at the end of each month along with return of contributions to the appropriate regional office of the Corporation;

• Employer and employees are required to contribute 3.25% and 0.75% of gross wages respectively towards ESI. Total 4% of gross wages is to be deposited by the employer with corporation online;

• An employer who fails to pay contribution within the periods specified in Regulation 31, shall be liable to pay simple interest at the rate of 12 per cent. per annum in respect of each day of default or delay in payment of contribution;

• Any interest payable under regulation 31-A may be recovered as an arrear of land revenue or under section 45-C to section 45-I of the Act;

• If an employer

• fails to pay contribution within the periods specified under Regulations 31, or any other amount payable under the Act, the Corporation may recover damages, not exceeding the rates mentioned below, by way of penalty : —

S.No. Period of Default Rates of Damages(percentage of arrears per annum)
(a) Less than two months Five
(b) Two months and above but less than four months Ten
(c) Four months and above but less than six months Fifteen
(d) Six months and above Twenty-five

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