EMPLOYER REGISTRATION UNDER EMPLOYEE STATE INSURANCE ACT

Registration of a factory/establishment with the Employees' State Insurance Corporation is a statutory responsibility of the employer under Section 2-A of the Act read with Regulation 10-B. The employer, in respect of a factory/establishment to which the Act applies for the first time, is liable to furnish Declaration of Registration in Form 01 (Employers' Registration Form) to the concerned Regional / Sub Regional Office  within 15 days after the Act becomes applicable.

This is obligatory on the part of the Employer. In addition to this, the employer will have to indicate, in a separate sheet, the name and address of the factory/establishment, number of employees, nature of duty and name, designation and address of the Manager, controlling such persons in respect of any other office(s) situated outside the premises of the Factory/ Establishment.

Procedure for Registration of Factories

Step 1

Ascertain whether your factory / establishment is situated within the area of implementation by ESIC (Implemented area). Regional Office, Sub Regional Office, Branch Offices, and Inspectorates Office of ESIC will guide you, on this matter, if contacted.

Step 2

It is statutory responsibility of the employer to get his factory registered under the ESI as per Section 2A of the Act, read with Regulation 10 B within 15 days of establishing or 15 days after the Act becomes applicable to the area in which the factory is situated. A declaration of registration in Form 01 (Employer’s Registration form) is to be submitted to the appropriate office (Regional Office, ESI Corporation,Chennai in your case) for the purpose.

 Step 3

The Sub Regional Office will allot a specific code number in Form C-11, after examining the aspect of coverage. This number so allotted is very specific for the employer and the same has to be used in all correspondence with ESIC. The area Branch Office to which the particular employer attached is the “Appropriate Office” for “Registration of Employees”. List of Branch Offices and Dispensaries under the Coimbatore Sub Region is furnished in a separate Booklet.

Sub Code Number

There may be a case where the employer is having the main factory / establishment at one station and sub-unit, branch office, sales office or registered office at another station, either within the State or outside the State; In all such cases, on request of the employer to the Regional Office / Sub Regional Office concerned, Sub-Code number is allotted to each sub-unit, branch office, sales office and registered office.

Author:

Sagar Gupta

Contact Number: 09918437886

Email: casgrgupta@gmail.com

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REGISTRATION UNDER EMPLOYEES’ PROVIDENT FUNDS

REGISTRATION UNDER EMPLOYEES’ PROVIDENT FUNDS

Provident Fund scheme was started by few concerns even before the enactment of the act. The government in 1952 framed this act for the benefit and welfare of the employees. This act is applicable to employees drawing pay not more than Rs. 6,500 pm but at the time of registration the same employee pay should not exceed Rs. 5,000.

For registration, a employer has to get these documents ready( to be submitted by an employer along with one or more of the documents mentioned below for obtaining Code Number):

1. Name of the establishment/factory and address.

2. Details of Head Office and branches with address.

3. Details of Code No. if any allotted to the Head Office.

4. Date of Incorporation/Set up (Please furnish any one of the documents mentioned overleaf in support of the proof of date of set up of the est./factory)

5. Employment Strength

(i) At present :

(ii)Month wise employment strength from the date of set up may be furnished in separate statement :

6. Nature of business activity/ manufacturing activity :

7. Details of legal set up of the establishment  (Please mention whether it is an incorporated Private or Public Limited Company, Society, Partnership or Proprietary concern) :

8. Details of the employers/ownership particulars etc. (Names, Designation and Addresses of Managing Director, Directors, Partners, Secretary etc. to be furnished) :

9. Wages disbursed for the month:

10. Details of Bankers: (Including Bank Branches & Account Number (s).)

11. Income Tax Permanent A/c. No.

12. Details of employees are furnished below :-

S.No.          Name of the employee        Father’s Name         Date of Joining         Wages (basic + D.A. &             Cash Value of food concession)

1.

2.

3.

4.

5.

6.

7.

8.

9

10

11

12

13

14

15

16

17

18

19

20

21

 (In case you have more than 21 employees the above information in respect of the other employees may be added in a separate sheet of paper in the same format continuing the serial number. ) 

11. Details of bank draft amounting to the contribution. Name of the Bank & and administrative charges paid in respect of the above  Branch employees. (Rate of Contribution at present is 12% by  employer and employees+ 0.5% towards E.D.L.I. . Draft No.& Date contribution and 1.15% towards administrative charges) 

 VERIFICATION 

The details furnished above are correct to the best of our knowledge and belief. It is clearly understood that we are liable for coverage from a date antecedent to the date of set up furnished above in the event of furnishing of false information.

(Signature)

Employer

Essential Document(s) to be submitted (For other than a proprietary concern)

1. A copy of Memorandum and Articles of Association and the certificate of incorporation issued by the Registrar of Companies, in the case of Public and Private Ltd. Companies.

2. A copy of partnership deed in the case of partnerships.

3. A copy of Registration certificate issued by the Registrar of Co-operative societies.

4. A copy of Registration certificate issued by Registrar in the case of societies registered under Societies Registration Act along with a copy of the objects and Rules of the Society.

5. Partition deeds creating HUF.

6. Any agreement or other legal documents in the case of Association of persons as defined in the Income Tax Act.

A list of documents which can be submitted as a proof of date of set up :-

(Any one of these documents has to be submitted)

1. First Sales Invoice.

2. Any proof regarding date of trial production.

3. Incorporation Certificate issued by the Registrar of Companies together with the report of the Managing Director to the Shareholders in the Annual Report.

4. Commencement of Business Certificate issued by the Registrar of Companies.

5. Certificate of Registration issued by the Registrar of Co-operative Societies.

6. Certificate of Registration issued under Societies Registration Act.

7. Certificate issued by Reserve Bank of India registering newly set up and non-banking financial companies.

8. License issued by the Health Authorities.

9. License/permission issued by the Municipal/Corporation Authorities. 10. Permission/approval granted by the appropriate State Govt. Authorities in the case of Educational Institutions.

11. Certificate issued by the Fire Authorities in the case of establishments coming under Explosives Act.

12. First assessment order issued by the Sales Tax Authorities.

13. First assessment order issued by the Income Tax Authorities.

14. Certificate issued by the Small Scale Industries authorities registering the establishment.

15. Reports/returns to Central Excise authorities.

16. Sanction/connection of power like H.T. connection, L.T. connection etc.

17. Any other Certificate issued by any authority under any law for the time being in force prior to the commencement of business activity/manufacturing activity. 

The above list is not exhaustive and is only illustrative. Any one or more of the above documents may be submitted along with your application for allotment of a Code Number.

These documents have to be taken to respective EPF office which can be found on http://www.epfindia.com/jurisdictionNew.asp.

Author:

Sagar Gupta

Contact Number: 09918437886

Email: casgrgupta@gmail.com

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EMPLOYEES' STATE INSURANCE ACT, 1948

EMPLOYEES' STATE INSURANCE ACT, 1948

The promulgation of Employees' State Insurance Act, 1948 envisaged an integrated need based social insurance scheme that would protect the interest of workers in contingencies such as sickness, maternity, temporary or permanent physical disablement, and death due to employment injury resulting in loss of wages or earning capacity.  The Act also guarantees reasonably good medical care to workers and their immediate dependants. Employees' State Insurance is a self-financing social security and health insurance scheme for Indian workers.

The ESI Act applies to non-seasonal factories or manufacturing units, shops & establishments, Private Medical & Educational Institutions employing 10 or more persons. Under the enabling provisions of the Act, a factory or establishment, located in a geographical area, notified for implementation of the scheme falls in the purview in the Act. Employees of the aforesaid categories of factories and establishments and drawing wages upto Rs.10,000/- a month are entitled to health Insurance cover under the ESI Act.

The Employees' State Insurance Corporation (ESIC) is the premier social security organization in the country. It is the highest policy making and decision taking authority under the ESI Act and oversees the functioning of the ESI Scheme under the Act. The corporation comprises members representing Central and State Governments, employers, employees, Parliament and the medical profession. Union Minister of Labour functions as the Chairman of the Corporation. A Standing Committee constituted from among the members of the Corporation acts as the Executive Body for the administration of the Scheme.

The basic provisions of the Act are :-

Every factory or establishment to which this Act applies shall be registered within such time and in such manner as may be specified in the regulations made in this behalf.

It provided for an integrated need based social insurance scheme that would protect the interest of workers in contingencies such as sickness, maternity, temporary or permanent physical disablement, death due to employment injury resulting in loss of wages or earning capacity.

In ESI scheme, a worker in insurable employment is called insured person (IP). Insured persons and their family are entitled to different types of benefits. The benefits are broadly classified into two: (1) Medical benefits and (2) cash benefits.

The employees registered under the scheme are entitled to medical treatment for themselves and their dependents, unemployment cash benefit in certain contingencies and maternity benefit in case of women employees. In case of employment-related disablement or death there is provision for a disablement benefit and a family pension, respectively

Thus in nutshell we can say, it provided for six social security benefits:- 

1.       Medical Benefit

2.       Sickness Benefit

3.       Maternity Benefit

4.       Disablement Benefit

5.       Dependants' Benefit

6.       Funeral Expenses 

These were some of the provisions regarding Employees State Insurance Act.

Author:

Sagar Gupta

Contact Number: 09918437886

Email: casgrgupta@gmail.com

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Point of taxation [Rule 2(e)] of Service Tax

For the purpose of charging service tax on any service, the incidence of levy is on person rendering of a taxable service which is termed as point of taxation. Usually people have confusion regarding the point in time when a service is deemed to be provided and thereby service tax is to be deposited. Therefore the Rule 2(e) is summarized below:

Where,

*is even if payment might be received after 01.04.2011 but service was provided or billed before the said date will be subject to old rule.

# is that if Invoice is not issued within 14 days of completion of service, then Date of Invoice will be changed to Date of Completion of service

$ is that if Invoice is not issued within 30 days or 45 days in case of banks and financial institutions of completion of service, then Date of Invoice will be changed to Date of Completion of service

Specified Cases:

Reverse Charge Mechanism - Rule 2(1)(d):

Date of Payment, if the payment is received within 6 months. In other cases, the normal rule of taxation will apply.

Export of service:

Date of Payment, if the payment is received within the time limit prescribed by RBI. In other cases, the normal rule of taxation will apply.

Individual/Firms whose aggregate value of taxable service is less than Rs 50 Lakhs in previous year

Date of Payment -  upto taxable service of Rs. 50 Lakhs only.

Individual/Firms providing services of Architect, CA, CS, ICWAI, Legal Consultancy, Consulting Engineer or Interior Decorator:

            Date of Payment

Associated Enterprises (Holds >=20% Share Capital)

            Date of credit in books or date of payment whichever is earlier

Continuous Supply of Services

The persons falling in continuous supply of service [Rule 2(c)] i.e. services provided where contract is of more than 3 months or prescribed by Central Government will be collecting tax on date of completion of service. Date of Completion of service is the milestone fixed by the provider as to when payment for the service becomes due. For eg, in case of telephone service, date of completion of service will be the date when bill is issued to the subscriber for payment of dues.

Date of Payment [Rule 2A]

Now the date of payment of service tax will be date of payment entry in books or date on which amount is credited in bank account, whichever is earlier. But if there is change in the service tax rate or for the first time tax is imposed and the payment in bank is credited after 4 working days, then date of payment shall be date of credit in bank account only.

Author:

Sagar Gupta

Ph: 09918437886

Email: casgrgupta@gmail.com

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EMPLOYEES’ PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952

EMPLOYEES’ PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952

Provident Fund scheme was started by few concerns even before the enactment of the act. The government in 1952 framed this act for the benefit and welfare of the employees. This act is applicable to employees drawing pay not more than Rs. 6,500 pm but at the time of registration the same employee pay should not exceed Rs. 5,000. This act deals with:

1.   The Employees’ Provident Fund Schemes, 1952,
2.   The Employees’ Pension Scheme, 1995, and
3.   The Employees’ Deposit linked Insurance Scheme, 1976

Applicability:

a. To every establishment which is a factory engaged in any industry specified in Schedule 1 and in which 20 or more persons are employed, and

b. To any other establishment employing 20 or more persons or class of such establishments which the Central Government by notification on the official gazette specify in this behalf.

Non-Applicability:

a.       Establishment registered under the Co-operative Societies Act, 1912 or under any other law for the time being in state relating to cooperative societies, employing less than 50 person without the aid of power,

b.      Establishment belonging to Central or State Government whose employees are entitled  to the benefit of these provident and pension funds in accordance with any scheme or rule framed by Central or State Government governing such benefits,

c.       Establishment belonging to Provincial or State Act whose employees are entitled  to the benefit of these provident and pension funds in accordance with any act governing such benefits,

If once such establishment falls within this act, then the act will apply to such establishment even if the number of employee falls below 20.

Employees Provident Fund Scheme:

This act has been passed by Central Government. This fund is administered by Central Board which is administered by Board of Trustees.

Employee entitled and required to join Provident Fund:

 Every Employee of the establishment earning salary or wages upto Rs. 6,500, except:

1.       An employee who having been a member withdraws full amount of his accumulations in the fund,

2.       An employee whose pay at the time be is otherwise entitled to become a member of the fund exceeds Rs. 5,000 pm

3.       An apprentice

Where wages or salary consists of Basic Salary or Wages, Dearness Allowances, Cash value of food concessions and retaining allowances.

Contribution:

A.      Employee: 12% of wages though more can be contributed, even upto 100% of wages though employer is not bound by this.

B.      Employer: 12% of wages, where 3.67% goes to provident fund and other 8.33% to pension fund.

Due Date:

Employer is required to pay amount received from employee on or before 15^th of the following month, i.e. contribution of Oct before 15^th November.

Procedure of Application:

Provident fund form is to be filled up along with incorporation documents, MOA, AOA, PAN, Address Proof; etc as before 30 days from the date such act becomes applicable on the establishment.

Withdrawal:

Funds can be withdrawn by filling up Form 19. A employee can withdraw the amount only if he/she don’t get into employment for the 2 month’s period. This requirement of 2 months is not applicable if girl withdraws such amount for her marriage.

Advance:

Advance can be taken on this account for marriages (self, siblings, children, etc), buying a house, major surgical operations, repayment of loans, etc in certain cases, etc which is non refundable in nature.

Transfer:

Provident fund can be transferred in case person goes for another job at another place after filling up relevant Form.

Online Provident Fund facility:

Now online facility of EPF is available. One can see the members detail, correct the information present. DSC of the authorized person is required for online submission of claims. Here,

a.       User name and password is required,

b.      The form here is ‘Transfer Claim Form’, instead of Form 13,

c.       Form can be presented to present or previous employer for scrutiny,

d.      Physical filing is also permissible.

Employees’ Pension Scheme:

Government has introduced this scheme under section 6A, to claim this:

Minimum 10 years contributory service is required, and 

a.       Have attained 58 years of age, or

b.      Retirement, or

c.       Permanent total disablement, or

d.      Children pension, or

e.      Orphan pension.

The amount of monthly pension will vary from member to member. The formula is:

Members Pension = Pensionable Salary*(Pensionable Service + 2)/70

If the contributory service is less than 20 years but more than 10 years, monthly pension required is to be determined as if the member has rendered eligible service of 20 years. The amount so arrived shall be reduced at the rate of 3% for every year by every service by which the eligible service falls short of 20 years, subject to maximum reduction of 25%.

Employees’ Deposit Linked Insurance Scheme:

The act was framed in 1976. This act came into force from 1^st August, 1976.

a.       Applicability: All members of Provident Fund Scheme

b.      Contributions: 1% of total emoluments i.e. basic wages, dearness allowances including cash value of food concessions and retaining allowances.

c.       Administrative Expenses: Employers are required to pay charges to the insurance fund at the rate of 0.01% of the pay of the employee members for meeting various expenses subject to a minimum of Rs. 2/month

d.      Nomination: Members nominated in EPF is also nominated for such fund.

e.      Payment of assurance benefit: In case of death of Employee, an amount equal to average balance in the account of the deceased during the preceding 12 months or period of membership, whichever is less shall be paid to the person eligible.

f.        Exemption from the scheme: If a establishment has a scheme providing greater benefits than this scheme is exempted from this scheme.

Statutory protection is provided to the amount of contribution to provident fund under section 10 from attachment to any Court decree. The act authorizes the appropriate Government to grant exemptions to certain establishments or persons from the operation of all or any of the provisions of the scheme.

Author:

Sagar Gupta

Contact Number: 09918437886

Email: casgrgupta@gmail.com

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