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Rajeev Bhargava (Director)     04 April 2010

E.S.I Act

We have over 100 employees company  and  registered under ESI Act.  I understand that if we get a fan fixed calling electrician or even plumber to fix tap.  We have to deduct ESI and pay to ESI Corporation .  Is it true?

If I use coolie at railway station .  Am I suppose to deduct his ESI contribution

Please advise


 6 Replies

V. VASUDEVAN (LEGAL COUNSEL)     04 April 2010

As far as possible, avail the services of a firm who is registered with ESI for electrical work or any other service. If the firm is registered under the ESI Act, it would be suffice to take a declaration and the principal employer need not deduct or pay the ESI. Since even an electrician or a carpenter that a company hires could get injured and it is in the better interest of both employer and employee that the ESI mandates deduction/remittance of ESI.


Rajeev Bhargava (Director)     04 April 2010

Thank you Mr. vasudevan

we are not in electrician business

If i have to fix up fan in the office or fix the tap .  General practice is that one hires from the market , individuals

If we ask them that we will deduct ESI , I am sure no one will come and work for us

what about if I hire coolie at rail station , do i deduct his ESI also

V. VASUDEVAN (LEGAL COUNSEL)     04 April 2010

I have suggested the safer method for an organization for repairing and erection like works. For simple works like fixing bulb fan and petty items you do not pay wages but pay a service fee. Fixing a bulb is not a regular work for wage and a service. For coolie, the Coolies are licensed by the Railway authorities and as long as you pay them to the fixed porterage your obligation ceases.


Rajeev Bhargava (Director)     04 April 2010

Thank you Mr. vasudevan

i appreciate your guidence . 

I am sure you will agree that you can not get coolie at station on rail prescribed rates.

May I also ask you .  What happens if we use a vendor and he does work for us .  If he does not have or pay ESI.  will it be our liability?

Thanks in anticipation

Tapan Amoria (Manager H.R.)     05 April 2010

Dear Mr. Rajeev

It is correct that if you call the electrician for fixinf the fan or called plumber for fixing the tap you have to deduct the ESI from their payment.

By taking registration with ESI you cover the establishment and any repair and maintenance work carried in your establishment attract the ESI Provision.

If you use the coolie at railway station there is no need to deduct any ESI as he is not working in your establishment. However if you call the coolie in your premises for loading and unloading you have to deduct the ESI from the wages.

Question whether electrician or plumber will accept such deduction, probably no you have to book the expenses in the voucher @106.5 % and have to deposit the contribution with ESI.

If you appoint the vendor to provide you the services as the principal employer you are responsible for the contribution either you vendor will pay the contribution and charge you the same in service bill.

If the vendor does not contribute for ESI because he does not have 20 people in his company even though your establishment is resposible for contribution for the work done in your organization

Sanjay Purohit (Manager)     17 December 2011

Dear Vasudevan,

Is EPF will be deducted on service provider bill, if he/she is provide us plumber for 1 or two hours once in a blue moon. However, i need supportive circulars.

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