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Employee State Insurance Act

Section:39, Reg 26, 31 :Payment of Contributions on Closure

Obligation : To pay all ESI contributions on the last day of closure.

Type:Trigger Frequency: Quarterly

Action to be taken:
Pay all ESI contributions on or by the last day of closure and submit a return in Form 6 (ESI Regulations) of all contributions on the last day of its closure. Submit a return of contributions in quadruplicate in Form 6 within 21 days of the date of permanent closure to the appropriate ESI office.

Audit Requirement:
Have all ESI contributions been paid on or before the last day of closure ? Has a return of contributions been submitted within 21 days of the date of closure ?

Supporting Documents:
Proof of payment of contributions, Copy of Return of Contributions

Related Documents:
 Form 6 - Regulation 32 : Register of Employees (Old Form 7)   View doc  49.2 Kb

Related Triggers:
Closure Of An Undertaking/Establishment
Closure Of Any Part of A Factory

Related Keywords:
Closure
Contributions
ESI (Employee State Insurance)
Payment of Wages

Related Sections:
Employee State Insurance Act, 1948
Chapter:Contributions| 39:Contributions:
(1) The contribution payable under this Act in respect of an employee shall comprise contribution payable by the employer (hereinafter referred to as the employer's contribution) and contribution payable by the employee (hereinafter referred to as the employee's contribution) and shall be paid to the Corporation.
[(2) The contributions shall be paid at such rates as may be prescribed by the Central Government:
Provided that the rates so prescribed shall not be more than the rates which were in force immediately before the commencement of the Employees' State Insurance (Amendment) Act, 1989.]
[(3) The wage period in relation to an employee shall be the unit in respect of which all contributions shall be payable under this Act.]


(4) The contributions payable in respect of each [wage period] shall ordinarily fall due on the last day of the [wage period], and where an employee is employed for part of the [wage period], or is employed under two or more employers during the same [wage period], the contributions shall fall due on such days as may be specified in the regulations.
(5) (a) If any contribution payable under this Act is not paid by the principal employer on the date on which such contribution has become due, he shall be liable to pay simple interest at the rate of twelve per cent per annum or at such higher rate as may be specified in the regulations till the date of its actual payment: -
Provided that higher interest specified in the regulations shall not exceed the lending rate of interest charged by any scheduled bank.
(b) Any interest recoverable under clause (a) may be recovered as an arrear of land revenue or under Section 45-C to Section 45-I.
Explanation: In this sub-section, "scheduled bank" means a bank for the time being included in the Second Schedule to the Reserve Bank of India Act, 1934.]


Employee State Insurance (General) Regulations, 1950
Chapter:Collection of Contributions Etc| 26:Return of contributions to be sent to appropriate Office:
(1) Every employer shall send a return of contributions in quadruplicate in Form 5 along with receipted copies of challans for the amounts deposited in the Bank, to the appropriate office by registered post or messenger, in respect of all employees for whom contributions were payable in a contribution period, so as to reach that office-
(a) within 42 days of the termination of the contribution period to which it relates;
(b) within 21 days of the date of permanent closure of the factory or establishment as the case may be;
(c) within 7 days of the date of receipt of requisition in that behalf from the appropriate office.

(1-A) Every employer shall be required to submit details in Form 5 (Return of Contribution) with regard to employees engaged through Principal and Immediate Employers and their coverage, submission of Declaration Forms, distribution of temporary Identification Certificates/Permanent Identity Cards and wages considered for payment of contribution and wages excluded for such purpose.

(2) For the purposes of Section 77 of the Act, the due date by which the evidence of contribution having been paid must reach the Corporation shall be the last of the days respectively specified in clauses (a), (b) & (c) of sub-regulation (1). Employee State Insurance (General) Regulations, 1950
Chapter:Collection of Contributions Etc| 31:Time for payment of contribution:
An employer who is liable to pay contributions in respect of any employee shall pay those contributions within 21 days of the last day of the calendar month in which the contributions fall due:

Provided that where a factory/establishment is permanently closed, the employer shall pay contribution on the last days of its closure:

Provided that an employer may opt, in such manner as may be prescribed by to the Director-General, for payment of amount in advance towards contribution to be adjusted against contributions payable by him (including employees contribution) for a wage period so that the balance of advance amount continues to be more than the contributions due and payable at the end of the concerned wage period. Such employer shall furnish in the prescribed pro forma (Form 5-A), a six-monthly statement of contributions payable and paid in advance with the balance left at the end of each month along with return of contributions to the appropriate regional office of the Corporation.