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Tushar Chowdhary (Lawyer/Consultant)     11 September 2009

Legality of E.S.I. Contribution

"A" is an establishment covered under E.S.I.C. Act and "B" is an outside agency specialized in doing some specified job. "A" carried out some job work from "B". "B" has performed the jobwork with it's own manpower in it's own premises and submitted a Bill/ Charge of Rs. 50 Lakhs for its services rendered to "A". "A" shown the amount of "B" i.e. Rs. 50 Lakhs in their Books of Account as Processing Charge.

Whether "A" is liable to pay E.S.I. Contribution on this said amount???

Please quote your reply with the support of latest Judgement of Apex Court...



Learning

 6 Replies

H. S. Thukral (Lawyer)     11 September 2009

If the work is done through employees of the contractor ( immediate employer) outside the premises of the principal employer and principal employer does not have any control or supervision over such work or employeeds then such employees of the immediate employer are not the employees of the Principal employer. This is clear from the definition of employee in the Act  2(9) . You can go through the leading judgement on this issue  Rajkamal Transport v ESIC 1996(2) LLJ 435 (SC)  

Suresh C Mishra (advocate)     11 September 2009

 I am agree with Mr Harbhajan Singh Jee .

subhash chander verma (1)     12 September 2009

The clarification by  Mr Harbhajan Singh shall be more valid if their is no functional integrality of the contractor's firm with the Principal firm, meaning thereby that the contractor's firm does and can exist independent of the principal's firm having its own resources, financial and managerial setup and not working under the direct or indirect control of the principal firm.

SC Verma, Advocate

  

Arihant AC (Legal Advisor)     13 September 2009

Dear Tushar,

please go through the said attached file in which I think you will get your reply.

 


Attached File : 51 coverage of outside jobwork letter.doc downloaded: 343 times

H. S. Thukral (Lawyer)     13 September 2009

An appreciable contribution by NAC. Thanks 

Tushar Chowdhary (Lawyer/Consultant)     20 September 2009

I am very thankfull to all of you for your precious advice/opinion.

But during the course of this question few more questions arose before me, i.e. for how many years a company is liable to keep it's records as per E.S.I.C. Act. or what is the time limit for the E.S.I.C to recover it's dues from the employer.


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