Facts:
1. A company which in the manufacturing Environment has deducted ESI amount and paid on bahalf of the Service providers.
2. The rate of deduction is 6.5% on the Gross bill.
3. This is done because the Service provider doesn't have ESI registration.
Questions:
1. Whether the Company can deduct ESI?
2. If so the rate of deduction is right?
3. If the Rate of deduction is right whether the basis amount is right?
I think are talking about service providers labour yes you have to deduct ESI if the labour is working for more than 1 year in your manufacturing unit. Employer’s contribution will be 4.75% of gross or employees contribution will be 1.75% of gross but gross did not crossed the limit of 15000/-.
Can U mention the section which mention 1 year.
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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