Any contribution due under the Act and not paid, can be recovered under Section 45-C to  Section 45-I by the Revenue Recovery Officer of the ESI Corporation.  The employer can raise any dispute for adjudication in the Employees Insurance Court of the area set up under Section 74 of the Act within the prescribed time limit from the date on which the  cause for action arose.  This limitation period as provided in Section 77 of the Act is not applicable to revenue  recovery ;action under section 45-C to 45-I of the Act.

               The sections, rules and regulations which empower the Corporation to make such claim and recover the contribution are as follows :

1) Sections 39, 40, 44, 45A, 45C to 45-I and 85B of the ESI Act, 1948
2) Rule 51 of the ESI Central Rules, 1950
3) Regulations 26,29,31, 31A, 31C and of ESI(General) Regulations, 1950
The notice forms and letters that are being used to raise such demands along with brief procedures of compliance are detailed below:

RATE OF CONTRIBUTION:

Up to 26.01.1985 Total 7% (E.C. -2.25% + E.S. -4.75%)
27.01.1985 to 31.03.1992 Total 7.25% (E.C. -2.25% + E.S. -5%)
01.04.1992 to 31.12.1996 Total 5.5% (E.C. -1.5% + E.S. -4.00%)
01.01.1997 onwards Total 6.5% (E.C. -1.75 % + E.S. -4.75%)

1)  C-18 Actual Basis-This is issued when actual amount of contribution has been determined by the authorized officer and the claim is made on the amount due as result of non-payment or short payment.

2)  C-18 Adhoc Basis- This occurs in two situations:

 i)   When the employer has not paid the regular contribution in respect of its employees, claim is made on the assumed wages in respect of the total number employees as per last record of the employer.  The wages assumed is Rs.5500/- per head per month w.e.f. 01.10.2006

 ii)   When an inspection of any unit is conducted and it is seen that there are some additional employees in respect of whom records well defining the wages amount (known as the Omitted Wages) is not maintained by the employer, the claim is made either on the amount booked under the relevant Head of Accounts or wages amount as observed by the Social Security Officer

                In both these cases, the employer is given an opportunity to represent his case, in case he differs on the amount claimed from him.  His submission must be substantiated with documentary evidence wherein he will clearly bring out the wages components.

ASSUMED WAGES PER EMPLOYEE PER MONTH:

Up to 31.03.1992 – 880/-
01.04.1992 to 31.12.1996 – 1650/-
01.01.1997 to 31.03.2004 – 3575/-
01.04.2004 to 30.09.2006 – 4125/-
01.10.2006 onwards – 5500/-.

3)   C-18 Interest-This is a claim occurring out of late payment of contribution.
                In case of regular contribution, claim is calculated on the number of days by which payment has been delayed from the due date.The due date for payment of contribution in respect of a particular month is the 21st day of the subsequent month.But if the 21st day of the month is a holiday, the due date will be the next working day.

                In case, the wages amount has been determined as a result of inspection, the due date of payment of contribution is 21 days from the date of issue of C-18 Adhoc.

                The employer is liable to pay simple interest @12% with effect from 01.10.05 from each day of default.

                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 12% per month or such higher rate as may be specified in the regulations till the date of its actual payment.

 RATE OF INTEREST:

Up to 19.10.1989- 6%
20.10.1989 to 31.08.1994 – 12%
01.09.1994 to 30.09.2005 – 15%
01.10.2005 onwards – 12%

 4)  D-18-This claim is invoked to recover the damages caused out of late payment of contribution. The Corporation is empowered to recover damages under section 85(B) as under.
                In case of regular contribution number of delayed days is calculated wage period wise. Relaxing 21 days (if it falls on Sunday/holiday 22nd day) of the last day of the calendar month in which the contribution falls due date of payment.
                In case of first coverage the delayed days is calculated after relaxing 21 days from the date of issue of coverage notice/C-11 to date of payment.

i) On the delay of up to 2 months @ 5% per annum

ii) On the delay of 2 months and above but less than 4 months   @ 10% per annum 

iii) On the delay of 4 months and above but less than 6 months   @15% per annum

iv)   On the delay of 6 months and above @ 25% per annum in case of contribution claimed on omitted wages, no damages is claimed  if payment made within four calendar months from the date of inspection or 21 days from date of issue of speaking order, whichever is earlier.

                The employer is afforded an opportunity of making representation, if any, at the time of personal Hearing.

 5) Orders-Once Personal Hearing is held over C-18/D-18 speaking orders are issued wherein the assessment of the Branch Officer is clearly brought out.  The employer has to deposit the amount within 15 days from the date of issuance of that order, failing which the amount is recovered as arrears of land revenue.  In case of C-18 (Adhoc), speaking orders are issued under Section 45-A whereas in case of D-18 speaking orders are issued under Section 85-B.  Speaking Orders can also be issued on   exparte basis.