How to obtain ESI Registration in India and Returns Filing Procedure

calendar06 Dec, 2019
timeReading Time: 5 Minutes
ESI Registration in India

ESI Registration is a certification provided to almost all companies in India for providing medical, maternal and disablement benefits. However, not all employers need to obtain ESI Registration or ESIC Registration based on the number of people employed by them. This article focuses on ESI Registration, the benefits of having one and the penalty which you have to pay if you don’t obtain ESIC Registration.

What is ESI Registration?

The Employee State Insurance Act of 1948 is an act that provides benefits to employees in case of sickness, maternity and employment injury. After that, to provide those benefits to the employees by the employer, there was a need to set up a provision to provide certification to companies providing these benefits to its employees. ESI Registration is the certification that needs to be obtained by such companies employing over ten people (20 in some states) and taking maximum salary of Rs. 21, 000/-per month and minimum wages x 6 x 6.5%. This scheme mandates that the employer shall contribute an amount of 3.25% from the entire monthly salary to be paid to the employee while the employer needs to contribute merely 0.75% of his monthly salary. The only exception to the employee in paying contribution is employees whose salary is less than Rs. 176/- per day.

Who needs to obtain ESI Registration in India?

Under section 1 (5) of the ESI Act, 1948, the following entities need to obtain ESIC Registration;

  • Cinemas
  • Shops
  • Restaurants or Hotels only engaged in sales.
  • All Road Motor Transport Establishments
  • Every newspaper establishments (which are not covered under the factory act)
  • Private Educational Institutions

What are The Benefits of ESIC Registration in India

The advantages of getting the ESIC Registration are as follows;

  • Benefits in case of illness at the rate of 70% (in the form of salary), in case of any certified sickness and which may last for a maximum of 91 days in any year
  • Medical Benefits to the employee and their family members
  • Maternity benefits to women who are pregnant in the form of paid leaves
  • In cases, if any employee dies at work, then 90% of the salary is given to his direct dependents every month after the death of the employee
  • Same as the above point in case of disability of the employee
  • Funeral expenses
  • Old age care medical expenses

Documents required for ESI Registration in India

The documents required for ESIC Registration are as follows;

  • Registration certificate obtained either under the following acts:
  • Factories Act
  • Shops and Establishment Act
  • The Certificate of Registration in case of a Company, and the Partnership deed in case of a Partnership firm
  • (MOA) Memorandum of Association and (AOA) Articles of Association of the Company
  • List of all employees working in the business establishment
  • The PAN Card of the Business Entity as well as all the employees working in the organization
  • Compensation details of the employees
  • A cancelled cheque from the Bank Account of the Company
  • A list of Directors of the Company
  • Also a list of the Shareholders of the Company
  • A register containing the attendance details of the employees

Thereafter collecting all the above-mentioned documents, the following procedure needs to be followed for registering under the ESI Scheme;

  • Form No – 1 is to be downloaded and filled which is the Employers Registration Form
  • After downloading the PDF version of the form and filling it, it has to be submitted on the ESI website itself along with the above-mentioned documents.

Procedure for ESI Registration in India

The following steps are involved in the ESI Registration procedure;

Step 1: Login to ESIC Portal

The employer should click on to register as an employer under the ESI Act and on home page select the ‘Click here to Login’. They will fill up the required details and sign up.

Step 2: Confirmation mail

The employer shall receive a confirmation email which shall contain the username and password details for both the employee and employer for getting registered under the ESIC scheme

Step 3: Employer Registration Form-1

Log in to the ESIC portal together with the given username and password. Click on the option for ‘New Employer Registration’. The employer shall select the ‘Type of Unit’ from the list and then click on the ‘Submit’ button. Then the employer will have to fill the details in the ‘Employer Registration – Form 1’and click on the ‘Submit’ button.

Step 4: Payment for Registration

After submission of the Form-1, the employer needs to fill the amount to be paid in the ‘Payment of Advance Contribution’ page and select the payment mode. The employer shall pay the advance contribution for the time period of 6 months.

Step 5: Registration Letter

On successfully paying the advance contribution of six months the Registration Letter (C-11) is sent to the employer which contains 17 digits Registration Number by the ESIC department. This Registration Letter (C-11) is a legally binding proof of registration of the employer.

Furthermore, any change in the company or any change in its employees has to be mandatorily be intimated to the ESIC

ESI Return Filing

After obtaining ESIC Registration, you have to file ESI Returns twice a year.

Furthermore, you need to attach the following documents to file ESI Return;

  • Employees Attendance Register
  • Register of wages
  • Form 6 – Register
  • Register of any accidents which have occurred on the premises of the business
  • Monthly returns and challans

Offences and Penalties

The amount deducted from the wages of employee as an employee contribution is considered to have been endowed to the employer. Therefore, it is the responsibility of the employer to deposit the contribution with the ESI.

  • In case of any delayed payment or non-payment of the Employee’s contribution deducted from the employees income amounts to ‘Criminal Breach of trust’ is punishable under IPC sections 406, 409 and it is also an offence u/s 85 (b – g) of the ESI Act.
  • Non-payments, falsifying payments or delayed payments under ESI Act may impose with imprisonment up to 2 years and fine of an amount up to Rs 5,000.
  • Consequences of Delayed Payment – An employer on failure to pay the contribution within the specified time limit in accordance with the regulation shall be liable to pay a simple interest at 12% rate per annum in reference of everyday delay or any default in payment of the contribution.
  • The penal provisions for Non-Payment or Delay in Payment of Contribution –

The company may charge and recover the damages in accordance with the Regulations at the given below following rates, which shall not be beyond the amount of contribution payable in default or in case of delay in payment of the contribution.

Period of delay Rate of damages in % p.a
Less than 2 months 5%
2 to 4 months 10%
4 to 6 months 15%
6 months and above  25%

Under Section 85(a) the employer is liable for the first time for prosecution, and in case he repeats the offence, he shall be liable for enhanced punishment with every repetition.

In Conclusion

ESI Act of 1948 provides with the regulations and guidelines of providing various benefits to the employees by the employers in case of illness, or death of an employee at the place of work. Also, companies holding the ESI Registration in India have to provide maternity benefits to pregnant ladies of the company in the form of paid leaves. Furthermore, every employee of such company enjoys various advantages mentioned in the ESI Act after registering under the ESI Scheme.

Read our article: How to apply for EPF Registration online?

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