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Online ESI Return Filing: Process, Penalty for Late Filing

Updated on :  

08 min read.

Employees State Insurance Corporation (ESIC) of India is a significant multifaceted social system designed to provide socio-economic security to workers and their dependents. The system ensures that the workers and his family do not suffer in case of unseen, unfortunate circumstances.

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.

On successful registration of the establishment, returns can be filed online by the employer. To file ESI returns online, the employer must follow the below-mentioned procedure:

  • The login credentials will be available once registered. The same will be required for the online filing of returns.
  • Once the login credentials are available, the employer must log in to the official website that is www.esic.nic.in.
  • Once he is able to log in using the credentials, there is a list of actions that are available. For instance, modify employee details, report an accident and so on.
  • To file the return, the employer must first verify if all the employee details are up to date and then file the return.
  • The employer must then fill the bank details and submit them to file the returns.
  • After that, the employer can go to the ‘List of Actions’ and ‘Generate Challan’.
  • The challan must be downloaded and documented for future reference and inspections.
  • The website also offers various actions that the employer can take like modify employee details, report accidents, add new employees, and so on.
  • The contributions towards employee state insurance are very beneficial to employees, and hence the provisions for nonpayment or delayed payment are very stringent.
  • The half-yearly return of ESIC for the period April to September is due by 12 November, and October to March is due by 12 May.

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 a fine of up to Rs 5,000.

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.

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 DelayRate of Damages in % p.a.
Less than 2 months5%
2 to 4 months10%
4 to 6 months15%
6 months and above25%

The employer is liable for prosecution under Section 85(a) for the first time, and if the employer repeats the offence, he will be liable for enhanced punishment for every repetition. The ESI has been established for the benefit and betterment of workers, and the employer must ensure that the purpose is served.

Disclaimer:The materials provided herein are solely for information purposes. No attorney-client relationship is created when you access or use the site or the materials. The information presented on this site does not constitute legal or professional advice and should not be relied upon for such purposes or used as a substitute for legal advice from an attorney licensed in your state.

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