Monday, October 12, 2009

Legality of E.S.I. Contribution

QUESTION-- "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...

ANSWER----f 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)

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 24 times

1 comment:

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