Jagannathan (Manager) 11 January 2012
Sir
we pay sales commision to to an individual thru whom we get job orders .We generally pay 10% of the order value to the person, and we also deduct TDS for the amount.The recepient also file IT return by obtaining form 16 -a from us.The payment of this kind runs in to lakhs per annum ( but paid in frequent intervals) to the particular individual.Does this cover under ESI.Kindly clarify
Thanking you
jagannathan
Kumar Doab (FIN) 11 January 2012
COMMISSION TO DEALERS/AGENTS:
Where dealers/agents are appointed by the employers but no regular wages are paid and it is not obligatory on the part of such dealers/agents to attend to the factories/ establishments and they are paid commission only on the quantum of sales, in such cases the amount paid by the employer as commission/dealership does not constitute wage under Section 2(22) of the ESI Act and hence no contribution is payable.
https://esic.nic.in/wages.htm
kameswarao S (Head HR) 12 January 2012
for better control and compliance declare him as a consultant and pay accordingly then you don't have any confusion and no statutory authroity can question about non compliance because all consultants are out of PF / ESI etc., even the IT also can be at the reduced percentage.
Regards - kamesh
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