ESI Return Filing

What is ESI Return Filing?

ESI Return Filing refers to the process through which employers file returns under the Employees’ State Insurance (ESI) scheme. The ESI scheme is a social security program in India aimed at providing financial protection to employees in case of sickness, maternity, disability, or death due to an employment injury. The filing of ESI returns ensures compliance with the Employees’ State Insurance Corporation (ESIC) regulations and helps maintain accurate records of contributions made by both the employer and employees.

Who Needs to File ESI Returns?

• Employers with ESI Coverage:
  Employers who are registered under the ESI Act and have employees whose wages are within the prescribed limit are required to file ESI returns.
• Companies with 10 or More Employees:
  The ESI Act applies to all establishments with 10 or more employees earning a salary up to ₹21,000 per month (or ₹25,000 for employees with disabilities).
• Factories, Shops, and Other Establishments:
  All manufacturing units, factories, and establishments with the required number of employees need to file the ESI return.

Benefits of ESI Return Filing:

1. Social Security for Employees:
   Filing ESI returns ensures employees are covered under the ESI scheme and are eligible for benefits like medical treatment, sickness, maternity, and disability benefits.
2. Compliance with Law:
   Ensures that the employer complies with the statutory requirements of the Employees’ State Insurance Act and avoids penalties or legal action.
3. Smooth Operations:
   Timely filing of returns helps maintain a smooth relationship with the ESIC and ensures that employees continue to receive their entitled benefits without disruption.
4. Reputation and Trust:
   Adhering to ESI filing rules helps businesses build a reputation as a responsible employer, enhancing employee trust and loyalty.

Process for ESI Return Filing:

1. Register with ESIC:
   • Before filing ESI returns, the employer must register the company or establishment with the Employees’ State Insurance Corporation (ESIC) and obtain an ESI code number.
2. Calculate Contributions:
   • The employer must calculate the total contributions for the employees. The ESI contribution rate is:
     • Employee’s contribution: 0.75% of wages
     • Employer’s contribution: 3.25% of wages
   • Contributions are based on the employee’s wages (up to ₹21,000 per month).
3. Prepare ESI Return Data:
   • Prepare the data regarding the total number of employees, their wages, and the total amount of contributions made by both the employee and the employer.
4. Log in to the ESIC Portal:
   • Visit the official ESIC portal (https://www.esic.in) and log in using your ESI code and password.
5. File the ESI Return:
   • Employers need to file their quarterly return (Form 6) online on the ESIC portal. This form includes details such as:
     • The number of employees covered under the ESI scheme.
     • Monthly contributions made by both the employer and the employee.
     • Total wages of all employees.
6. Submit the Return:
   • After filling out the necessary details in the return form, submit the return online. Ensure that all the information is accurate before submitting it.
7. Payment of ESI Contribution:
   • Along with the filing of the return, the employer must also pay the total ESI contribution due. This payment can be made online through the ESIC portal.
8. Receive Acknowledgment:
   • Upon successful filing, the employer will receive an acknowledgment from ESIC. Keep this acknowledgment for future reference.

Documents Required for Online ESI Filing Services:

1. ESI Code Number:
   The unique identification code provided by ESIC during registration.
2. Employee Details:
   Information about employees covered under ESI, including their wage details and working hours.
3. Wage Register:
   A record of wages paid to employees during the period for which the return is being filed.
4. Contribution Calculation:
   Detailed calculations of the employer’s and employee’s contribution based on their wages.
5. Bank Details for Payment:
   Employer’s bank account details for online payment of the contribution.

Due Dates for ESI Return Filing:

• Quarterly Filing:
  ESI returns are filed quarterly, and the due dates for filing returns and making contributions are:
  • 1st Quarter (April to June): 15th July
  • 2nd Quarter (July to September): 15th October
  • 3rd Quarter (October to December): 15th January
  • 4th Quarter (January to March): 15th April
• Penalty for Late Filing:
  • Employers who fail to file the return on time may be subject to a penalty.
  • Additionally, late payment of contributions also attracts interest and penalties under the ESI Act.

Penalties for Non-Compliance:

1. Late Filing Penalty:
   A fine for late filing or non-filing of returns can be levied, in addition to the interest charged on delayed payments of contributions.
2. Penalties for Non-Payment:
   Failure to pay ESI contributions can lead to severe penalties, including the imposition of interest on delayed payments.
3. Prosecution:
   In cases of serious non-compliance, ESIC may initiate legal action, including prosecution against the employer.