The Supreme Court has given a landmark judgement on 08/03/2021 that Conveyance Allowance given in any form shall not be included for the purpose of ESI Contribution (ESIC Vs. Texmo Industries). Based on this judgement, ESI Corporation has released a circular dated 08/11/2021 stating that Conveyance Allowance need not be taken for purpose of ESI contribution and this holds good effective from 08/03/2021. Consequent to this, following are some of the queries which needs clarifications:
a) Should Conveyance Allowance be included for the purpose of coverage and be excluded only for contribution?
b) If Conv All is given as a fixed amount to all employees, can it be excluded for both?
c) Since it comes in to effect from 8th March, would ESIC permit us to adjust the excess contribution paid on CA from 8th March to 31st Oct 2021? Or will it be refunded to the employer?
d) What will be the status of the pending cases on inclusion of CA for payment of contribution? Will they still be tried in the Courts?
Ranganathan RS
From India, Madras
10a) Should Conveyance Allowance be included for the purpose of coverage and be excluded only for contribution?
b) If Conv All is given as a fixed amount to all employees, can it be excluded for both?
c) Since it comes in to effect from 8th March, would ESIC permit us to adjust the excess contribution paid on CA from 8th March to 31st Oct 2021? Or will it be refunded to the employer?
d) What will be the status of the pending cases on inclusion of CA for payment of contribution? Will they still be tried in the Courts?
Ranganathan RS
From India, Madras
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ESI-Not-applica ble-on-Conveyan ce-Allowance.do c
Revision in conveyance allowance in Maharashtra from 1.10.2013.pdf