The government extends the due date to file October 2019 to March 2020 half-yearly ESI return from 12 May 2020 to 11 June 2020.
1. Registration and Filing of Returns
An employer who is eligible to be registered as per the Employee State Insurance Act 1948 (“Act”) must do so by abiding by the following steps: – An employer needs to keep all documents ready for reference. – Next, an employer must file Form 1, which is available in PDF format on the ESIC website. ESIC will verify all the details and issue a 17 digit unique number. This unique number is required for all filings. – Every employee will receive an ESI card post submission of the form stating all details by the employer. The documents required for registration are :- PAN card of the business.
- Address proof of business.
- The license obtained under Shop and Establishment Act or Factories Act.
- Basic documents required as per the nature of entity – Articles of Association, Memorandum in case of a company, partnership deed in case of a partnership and Limited Liability Partnership.
- Details of all directors, partners, and shareholders.
- Details of all employees along with their salary information.
- Bank details.
2. Consequences of Non-Payment or Late Payment of Employees’ Contribution
Amount deducted from employee’s wages as an employee contribution is deemed to have been entrusted to the employer. Therefore the employer has a higher responsibility to deposit the contribution with ESI. Non-payment or delayed payment of the Employee’s contribution deducted from the wages of the employee amounts to ‘Criminal Breach of trust’ is punishable under IPC Section(s) 406, 409 and also an offence u/s 85 (b – g) of ESI Act. Non-payments, delayed payments, or falsifying payments under ESI Act may attract imprisonment for a period extending up to 2 years and fine up to Rs 5,000.3. Consequences of Delayed Payment
An employer who fails to pay the contribution within the limit specified in the regulation shall be liable to pay simple interest at the rate of 12% per annum in respect of each day of delay or default in payment of contribution.4. Penal Provisions for Non-Payment or Delayed Payment of Contribution
The Corporation may levy and recover damages as per the Regulations, at the following rates, not exceeding the amount of contribution payable for default or delay in payment of the contribution.Period of delay | Rate of damages in % p.a |
Less than 2 months | 5% |
2 to 4 months | 10% |
4 to 6 months | 15% |
6 months and above | 25% |