ESI Return Filing: Penalty for Late Filing

Due to lockdown and several other restrictions on operations side, we will be not able to make the ESI remittance on time this month.

Is it okay to not make the ESI remittance? Also, want to understand what will be the consequences?

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Welcome to the community, Jyoti.

One of our expert will soon answer your question.

Hi Jyoti,

The employer can make an online payment for ESI remittance; please refer the link https://www.esic.in/ESICInsurance1/ESICInsurancePortal/PortalLogin.aspx; if the employer is unable to make an online payment, he/she can download the challan from the link given below and proceed.

http://www.esic.in/ESICInsurance1/RevenueOne/Monthly%20Contribution/downloadChallanPrint.aspx

Answering your query on late payment. As per ESI Act,

What is the time limit for contribution?

Contribution shall be paid in respect of an employee in a bank duly authorized by the Corporation within 15 days of the last day of the calendar month in which the contribution falls due for any wage period (Reg. 29 & 31).

What are consequences of non / late payment of employees’ contribution deducted but not paid?

Any sum deducted by the Principal employer from wages under the ESI Act shall be deemed to have been entrusted to him by the employee for the purpose of paying the contribution in respect of which it was deducted as per Section 40 (4) of the ESI Act,1948. Non-payment or delayed payment of the Employee’s contribution deducted from the wages of the employee amounts to ’ Breach of trust’ and is punishable under IPC 406, 409 and also an offence u/s 85 of ESI Act.

Will the delayed payment attract any interest?

An employer who fails to pay the contribution within the limit prescribed under Regulation 31, 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 ( Regulation 31-A).

What are the penal provisions for non-payment or delayed payment of contribution?

The Corporation may levy and recover damages under Reg. 31C 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. i) Less than 2 months 5 % ii) 2 to 4 months 10 % iii) 4 to 6 months 15 % iv) 6 months and above 25 % The employer is liable for prosecution under Section 85(a) for the first time, Whoever, having been convicted by a court of an offence punishable under the Act, commits the same offence shall, for every such subsequent offence, liable for enhanced punishment under section 85 A of the Act.

Hope the above answers your queries.

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Dear Bhuvana Anand,

I have a query.

What happens when organization do not have any employee whose salary is below 21K? Do they have to still file 0 conribution challan? And if yes, how and where? Will you please provide the link for the same? Thanks.

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Hi Shefali,

ESI is principally applicable for the factories and other establishments that has 10 or more employees with the wages not exceeding Rs. 21,000/- .

You can refer this link https://www.esic.nic.in/attachments/files/faq.pdf for queries related to ESI.

The employees who are not eligible for ESI are provided with alternative Company Group Insurances by the Employer.

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Dear Bhuvana Anand,

Thank you so much for your response.

However ours is small startup IT company. And we had registered for ESI as a few employees had salary below Rs. 21,000. Now that is no more the case. So, how should we proceed? Should we close our account with ESI or what is the procedure? Thanks.

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Dear Shefali, you can file NIL returns and continue as you may have any employee, casual or contract workers in future. In my opinion, once you register for ESIC, it will continue till the closure of the Unit.

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Dear Bhuvana Anand,

Absolutely agree with you. However, I do not find any link at ESIC portal to file NIL returns. So if you have / if you come across such link, please let me know. Thanks.

Thank you @Bhuvana_Anand for taking time to share so much information on my questions. Very helpful :slightly_smiling_face:

3 Likes

Hi Shefali,

There is no specific link for the NIL returns separately.

The employer have to login with the registered User ID and passcode, update the list of employees covered (mention the monthly contribution as NIL) and select the monthly contribution option and update the relevant columns and file the returns.

You have the option to download / save the employees list in pdf/excel format, update the data and file the returns accordingly.

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Thanks, Bhuvana!

I will explore this.

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But if there are no employees under21k then no covered employees, it will not show any employees when you go there to create challan. how do we fill NIL return? Can they just leave it like that until they get atleast one another employee who will be covered?

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Hi,

Once you log in with your account details, you have the option to file NIL returns there when you don’t have any employees qualifying therein. In the cases where there is no employee less than 21K, your excel update will have NIL returns with zero number of employees.

Till you have employees under that category, NIL returns should be filed.

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Hi Bhuvana,

For better understanding will you please share the format of excel file with zero number of employees? I had tried this once, but ESI portal did not accept the excel file. Thanks.

Hi Shefali,

Please note the template is provided within ESIC portal.

For better understanding, I attempt here to explain the steps to follow as given below:

Login to your account in www.esic.in

You will see ‘Employee’ Menu in which click on ‘List of Employees’.

It will open the List of Employees Window.

You have the option to download this list in the formats that are available therein (PDF/Excel). You can have this downloaded to know the list of employees for whom the ESIC IP has been registered.

In the main menu, click on ‘file monthly contribution’.

Click on ‘Sample Template’ option to download the template. Please read the guidelines given there.

You will have the template now in which you will fill in the IP number of the employees who is no longer within the ESIC limit.

Fill in the Employee details and fill zero in numeric on the column of ‘no. of days for the wages paid / payable during the month’ and ‘total monthly wages’.

The next 2 columns will ask for ‘reason’ and ‘last working day’, respectively and you can fill it with appropriate code as per the guidelines given in the template sheet.

Save this file.

Go to main menu and click on ‘file monthly contribution’.

Select the month & year for contribution.

Click ‘upload excel’ option and upload the template file that you have saved.

Once you upload, a contribution history page will display wherein you can see the NIL contribution to verify the details uploaded by you before proceeding with the filing.

Once you are sure, click ‘submit’ option and proceed with the next steps as displayed there.

After submission, you can go back to main menu and view your contribution history by selecting corresponding month. There is an option to print as well.

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