ESI deduction by immediate employer

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sachin garg (Querist)

30 December 2007 Dear Sir/Madam,
A company takes service of a electrician in it's premises and electrician is not registered under ESI.Whether ESI is deductible by the company being immediate employer,If yes at what amount ESI should be deducted when material is also used by the electrician.(Electrician is a firm)

Please reply soon and refer relevant sections/provisions.

Thank you,
Sachin garg

CA. Vineet Grover

CA. Vineet Grover (Expert)

31 December 2007 Hi Sachin,

Further, please clarify whether the electician is within the payroll of the company.
ESI is not applicable on firms.
There is a concept of immediate liability of the principal incase of default by the contractor.
As per the example, the electrician shall be treated as a contractor. The obligaiton of meeting all the statutory requirements is of electrician (firm) towards its employees failing which itb shall fall on the company. To be on the safer side you may claim for ESIC challsn from the electrician if its a big contract. In case of small contract you my ignore.
Rgds/
Vineet

sachin garg

sachin garg (Querist)

31 December 2007 Dear Sir,
Company has paid towards machin repair(Vending machine)of rs.750/- to SMC wheter i should deduct ESI on it?If yes On Which amount?

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)

03 October 2008 The ESI liability is there on the pricipal employer. As the amount is small you may not be affected much. But precaution is necessary for future.

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