Legality of E.S.I.C. Contribution

Tushar Chowdhary (Querist) 11 September 2009 This query is : Resolved
"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...
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Arihant AC (Expert) 14 September 2009
already answer
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KUMAR JAGADEESAN (Expert) 15 September 2009
There is no ESI contribution required on this. First of all the work was not carried by B inside the plant of A and hence in no way the persons employed by B can be covered under ESI in the hands of A .There is no necessity for any case law. ESI Act envisages inclusion of the wages of the workers of a contractor only (1). The term employee (Ref sect2 (9)(ii)of the ESI Act 1948 seeks to include the employees of an immediate employee (contractor's employees) only if the work is carried out on the premises of a factory or establishment.

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