Adjustment of Advance payment of ESIC

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

18 March 2010 Dear Sir,

Your expert Advise required on adjustment of advance payment of ESIC. Case listed below -

Case – We are manpower supply company and ESIC of April 09- Dec 09 of some employee deployed is made in one client office has been paid by us (where salary has been made of the unit).Further the amount also been paid by client (with impression that he his primary obligator of the payment but on the same ESIC code in which payment made by us).Now question is that the double payment has been made, can adjust on the future liability of ESIC.

Please give your feedback on the issue if you are aware on such kind of issues.

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

14 July 2024 In the scenario you've described, where ESIC (Employee State Insurance Corporation) contributions for the period April 2009 to December 2009 were paid twice — once by your company and once by the client where the employee was deployed — you are facing an issue of double payment. Here’s how you can approach this situation:

### Steps to Resolve the Issue:

1. **Verification and Documentation**:
- First, verify and gather documentation that clearly shows the double payment of ESIC contributions for the specified period.
- Ensure you have records such as payment receipts, ESIC challans, and any correspondence with the client regarding the payments.

2. **Communication with Client**:
- Contact the client with whom the double payment issue occurred. Explain the situation and provide them with the evidence of the double payment.
- Request the client's cooperation in resolving the issue, which may involve coordinating with them to adjust or refund the excess payment made.

3. **Adjustment of Future ESIC Liability**:
- If the client agrees to adjust the excess payment against future ESIC liabilities for the same employees or in some other manner, document this agreement properly.
- Ensure that any adjustment is reflected accurately in your records and communicated clearly to all relevant parties.

4. **Reconciliation and Accounting Treatment**:
- Reconcile your records to reflect the correct payment status of ESIC for the affected period.
- Adjust your accounting entries to account for any refund received or adjustment made by the client.
- Document these adjustments in your financial records and ensure compliance with accounting standards.

5. **Legal and Compliance Considerations**:
- If necessary, consult with a legal advisor or accountant to ensure that the resolution of this issue complies with ESIC regulations and any applicable laws.
- Keep track of any deadlines or statutory requirements for reporting adjustments to ESIC authorities.

### Important Considerations:

- **Proof of Payment**: Ensure you have clear proof of both payments made (by your company and by the client).
- **Client Cooperation**: Resolving this issue may require cooperation from the client where the employee was deployed. Open communication and documentation are key.
- **Compliance**: Ensure that any adjustments made are compliant with ESIC regulations and do not lead to any further issues.

In summary, the double payment of ESIC contributions can be resolved through communication with the client and proper adjustment of future liabilities. Documenting all steps and agreements is crucial to ensure clarity and compliance in resolving this issue. If you need further assistance, consider consulting with a professional who specializes in payroll and compliance matters.

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