GST

[GOODS AND SERVICE TAX]

What is GST?
The GST is basically an indirect tax that brings most of the taxes imposed on most
goods and services, on manufacture, sale and consumption of goods and services,
under a single domain at the national level.
In the present system, taxes are levied separately on goods and services. The GST
is a consolidated tax based on a uniform rate of tax fixed for both goods and
services and it is payable at the final point of consumption.
At each stage of sale or purchase in the supply chain, this tax is collected on value
added goods and services, through a tax credit mechanism.

Merits of GST
Life gets simpler
GST will replace 17 indirect tax levies and compliance costs will fall
Revenue will get a boost
Evasion set to drop - Input tax credit will encourage suppliers to pay taxes - States and
Centre will have dual oversight - The number of tax-exempt goods will decline
A common market
It's currently fragmented along state lines, pushing costs up 20-30%
Investment boost
For many capital goods, input tax credit is not available. Full input tax credit under
GST will mean a 12-14% drop in the cost of capital goods. Expected: A 6% rise in
capital goods investment, 2% overall.

Make in India
(a)Manufacturing will get more competitive as GST addresses cascading of tax, interstate tax, high logistics costs and fragmented market b) Increased protection from
imports as GST provides for appropriate countervailing duty.
Less developed states get a lift:
The current 2% inter-state levy means production is kept within a state. Under the
GST national market, this can be dispersed, creating opportunities for others
Freeing up online:
State restrictions and levies have complicated ecommerce. Some sellers do not even
ship to particular states. All this will end with GST

Demerits of GST

The Service Tax in India is now 15% but the proposed GST is about 18-20%. All the
services will be Costlier and this one of the Disadvantages of GST Bill on Common
Person.

There are some retail products where the Tax rate is only 4 percent but with GST it will be
costlier like Garments and cloths.

The control on business will be of state and central government so it may be some complex
for businessman

All credits will be online and some penalties are like criminal activity. So it is threatening
for small businessman who are now free from Taxes.

GST is also having three type of taxes and all have to be maintained and this not going too
easy for small Businessman.

Once GST comes all central, state taxes will be subsumed having only central GST and
state GST
There will be tax only on value addition at each stage with producer/seller able to set off his
taxes against central/state GST paid on purchases.
End consumer will bear only GST charged by last dealer
Tax evasion will be reduced as if you do not pay on what you sell you will not get input tax
credit.

Central Taxes that GST will replace:Excise Duty

Additional duty of excise (medical, toilet preparation, goods of special importance,
textiles,etc.)
Special additional duty on customs
Service tax
Cesses and surcharges

State taxes that GST will replace

State Vat
Central Sales Tax
Purchase tax
Entry tax
Luxury Tax
State cess and surcharge
Entertainment Tax
Tax on Advertisement
Tax on lotteries, betting, gambling

Goods that will get cheaper due to GST

Prices of cars, 2 wheeler, SUVs, ticket prices, electronic items like fans, lighting,
water heaters, air coolers, paint, cement.
Goods that will get costlier due to GST
Hotels, restaurants, mobile phones calls, cigarettes, textiles, branded jewellery,
airlines, train tickets.
Different rates of GST
At least five alternative options on rate structure have been presented to the GST
council
The Centre proposed a four-slab structure with two standard goods and services tax
(GST) rates of 12% and 18% a lower rate of 4% for precious metals, a threshold rate
of 6%, two standard rates of 12% and 18%, a higher rate of 26% and a cess on luxury
items, pan masala and tobacco products.

 Services will be taxed at 12% and 18% under this dispensation.

Most services would be taxed at 18% but those that have abatement will face a levy of
12%.
Some goods such as consumer durables that face a higher tax rate of 31% now,
including central levies and state taxes, could be moved to the lower bracket of 18%
instead of 26%, the highest slab.

1.Obtain PAN Number from Income

Tax Department

WHAT IS PAN
Permanent Account Number (PAN) is a ten-digit alphanumeric
number, issued in the form of a laminated card, by the Income
Tax Department, to any person who applies for it or to whom
the department allots the number without an application.
PAN enables the department to link all transactions of the
person with the department. These transactions include tax
payments, TDS/TCS credits, returns of income/wealth/gift/FBT,
specified transactions, correspondence, and so on. PAN, thus,
acts as an identifier for the person with the tax department.
PAN was introduced to facilitates linking of various documents,
including payment of taxes, assessment, tax demand, tax arrears
etc. relating to an assessee, to facilitate easy retrieval of
information and to facilitate matching of information relating to
investment, raising of loans and other business activities of
taxpayers collected through various sources, both internal as well
as external, for detecting and combating tax evasion and
widening of tax base.

A typical PAN is AFZPK7190K.

First three characters i.e. AFZ in the above PAN are
alphabetic series running from AAA to ZZZ
Fourth character of PAN i.e. P in the above PAN
represents the status of the PAN holder. P stands
for Individual, F stands for
Firm, C stands for Company, H stands for HUF,
A stands for AOP, T stands for TRUST etc.
Fifth character i.e. K in the above PAN represents
first character of the PAN holders last
name/surname.
Next four characters i.e. 7190 in the above PAN
are sequential number running from 0001 to 9999.
Last character i.e. K in the above PAN is an
alphabetic check digit.

Why Is It Necessary To Have

PAN?
It is mandatory to quote PAN on return of income, all
correspondence with any income tax authority. From 1 January
2005 it will be mandatory to quote PAN on challans for any
payments due to Income Tax Department. It is also compulsory to
quote PAN in all documents pertaining to the following financial
transactions :(a) sale or purchase of any immovable property valued at five lakh
rupees or more;
(b) sale or purchase of a motor vehicle or vehicle, [the sale or
purchase of a motor vehicle or vehicle does not include two
wheeled vehicles, inclusive of any detachable side-car having an
extra wheel, attached to the motor vehicle;]
(c) a time deposit, exceeding fifty thousand rupees, with a banking
company ;
(d) a deposit, exceeding fifty thousand rupees, in any account with
Post Office Savings Bank;
(e) a contract of a value exceeding one lakh rupees for sale or
purchase of securities;

(f) opening a bank account;

(g) making an application for installation of a
telephone
connection
(including
a
cellular
telephone connection);
(h) payment to hotels and restaurants against their
bills for an amount exceeding twenty-five thousand
rupees at any one time ;
(i) payment in cash for purchase of bank drafts or
pay orders or bankers cheques for an amount
aggregating fifty thousand rupees or more during
any one day;
(j) deposit in cash aggregating fifty thousand rupees
or more with a bank during any one day;
(k) payment in cash in connection with travel to any
foreign country of an amount exceeding twenty-five
thousand rupees at any one time.

Who should be contacted for

inquiries regarding PAN
applications?
For UTIISL
The Vice President
IT PAN Processing Centre,
UTI Investor Services Ltd
Plot No. 3, Sector - 11
CBD_ Belapur
Navi Mumbai-400 614
e-mail.- utiislgsd@
mail.utiisl.co.in
Tel No. 022-27561690
Fax No. 022-27561706

For NSDL
The Vice President
Income Tax PAN Services
Unit,
NSDL
4th Floor, Trade World, A
Wing
Kamala Mills Compound,
S. B. Marg, Lower Parel,
Mumbai-400 013
e-mail.tininfo@nsdl.co.in
Tel No. 022-2499 4650
Fax No. 022-2495 0664

2.BANK CURRENT ACCOUNT

Current Account
Definition and Uses
Who Can Open?
Procedure for Opening
Operation of Current Account
Cheque books and Statements
Interest
Documents needed for opening account
Nomination
Closing an Account

Definition and Uses

A current account is defined by the Reserve Bank
as, a form of demand deposit where from
withdrawals are allowed Any number of times
depending upon the balance in the account Or up
to particular agreed amount and shall also be
deemed to Include other deposit accounts that
are not savings deposit nor Term deposit.A
current account is opened usually for Commercial
or business purpose.

Who Can Open?

As stated earlier this account is opened for
business or Commercial use. Normally Current
account is opened by those who Have commercial
interest and have need to issue many cheques.
These include;
Individuals
Sole Proprietorships
Hindu Undivided Family
Partnerships
Trusts, Associations/Societies and clubs
Limited Companies.

Procedure for Opening

RBI has advised banks to include certificate in accounting
Opening forms confirming the identity, occupation and
address of
The prospective customers signed by the introducer.
Introduction to account is very much important for banks,
because in the event Of account not being introduced the
bank will not get the Protection under Section131 of the
Negotiable Instrument Act.
If An overdraft is given by mistake, the bank bears the risk
of loss if it Is un paid.
Several banks permit accounts to be opened by a self
introduction.However this does not give the banker any
comfort With regard to the moral standing of the person .

Operation of Current Account

At the time the account is opened, customer
would Mention how the account should be
operated.
The terms used are;
Single
Joint
Either or survivorin this case, should one of the
Account orders die, the survivor can draw the
balance in the account.
An account should not be opened, on a zero
balance as the banker in this instance has not
taken on deposit any amount.
An account holder will deposit cash or cheques in

 The RBI has stated that No bank should refuse an

Acknowledgement if the customer makes deposit
at the counter of the bank.
There is no restriction on the amount that may be
Deposited in a current account.
There are no restrictions on the number of
withdrawals That may be made in a period.
Customers make withdrawals from the account by
Drawing cheques or withdrawal slips if they do
not have a cheque book.

 If an individual or HUF withdraws Rs.50,000/-or

More in cash in one day banking cash transaction
tax is payable.
In case of companies and other bodies, the same
is payable if the withdrawal is Rs.1,00,000/- or
more.

Cheque books and Statements

When a cheque book is exhausted, the customer
should Fill in a cheque requisition form.
Normally banks ends new cheque books to customer
by courier. The RBI has stated that Cheque book should
be handed over to customers/their representatives at
the branch of the bank where they bank.
Banks either give customers a pass book or a
statement of the account with the bank. To improve
service RBI has asked.
Bank to ensure that full address and telephone number
of the branch is mentioned on the statements of
accounts.

INTERESTS
BANK Do not pay Interest on the current account
RBI prohibits interest on current accounts

NOMINATIONS
A single depositor can in the event of his
death, nominate
Who should be paid the balance lying on
his account.
Nomination may be made in the favor of
individuals only

DOCUMENTS FOR OPENING

CURRENT ACCOUNT

ADHAR CARD
PAN CARD
ELECTION ID
BUSINESS REGISTRATION DOCUMENTS

Closing an Account
To close an account all the account holders should
write to the bank stating that intent to close the
account.
All unused cheques should be cancelled and
return to the bank.
The bank may also request the customer to close
his Account if;
The customer is no longer desirable person and
the Account has not been operated for a long
time.

5. Service Tax

Service Tax
Service tax is a tax levied by Central Government of India on
services provided or to be provided excluding services covered
under negative list and considering the Place of Provision of
Services Rules, 2012 and collected as per Point of Taxation Rules,
2011 from the person liable to pay service tax. Person liable to
pay service tax is governed by Service Tax Rules, 1994 he may be
service provider or service receiver or any other person made so
liable.
It is an indirect tax wherein the service provider collects the tax
on services from service receiver and pays the same to
government of India. Few services are presently exempt in public
interest via Mega Exemption Notification 25/2012-ST as amended
up to date and few services are charged service tax at abated
rate as per Notification No. 26/2012-ST as amended up to date.

 Presently from 1 June 2016, service tax rate has been

increased to consolidated rate at 15% of value of
services provided or to be provided. The service tax rate
now is consolidated rate as education cess and
secondary higher education cess are subsumed with 2%
of "Swach Bharat Cess(0.50%)" has been notified by the
Government.
From 15 November 2015, the effective rate of service
tax plus Swachh Bharat Cess, post introduction of
Swachh Bharat Cess, was 14.5%. Currently, Swachh
Bharat Cess and Krishi Kalyan Cess would also be levied
on all services on which Service Tax is being levied and
therefore, the Service Tax (including Swachh Bharat Cess
and Krishi Kalyan Cess) applicable from 1 June 2016 has
become 15%.
Krishi Kalyan Cess Cenvat Credit Rules
CENVAT Credit will be available on Krishi Kalyan Cess.
CENVAT (central value added tax) credit, whose rules will

 At present, the effective rate of Service Tax is 12.36%

on the value of the taxable service. The above
effective rate comprises of Service Tax @12% payable
on the gross value of taxable service, Education
Cess @ 2% on the service tax amount, and Secondary
and Higher Education Cess @ 1% on the service tax
amount.

Registration of service tax

As per Service Tax Law it is mandatory for the following
categories of persons obtain registration: Every person liable to pay service tax under Reverse Charge
An input service distributor
Ever provider of taxable service whose aggregate value of
taxable service exceeds 9 lakhs in a financial year.
Every person mentioned above will have to get themselves
registered under the service tax law within 30 days from the
date of commencement of such service or business.
Whereas in case of service provider whose aggregate value of
taxable service not exceeded 9 lakhs in a financial year not
need to obtain registration, where in case he has obtained
registration he is liable to payment of service tax only if the
value of taxable services exceeds 10 lakhs rupees

Payment of service tax

As per Rule 6(1) of Service Tax Rules 1994 Service tax is paid to the credit
of the central government by 5th or 6th as the case maybe immediately
following the calendar month (5th or 6th as the case maybe immediately
following the quarter in case of partnership,individual and proprietary firm)
in which the service deemed to provided as per rules framed in this regard.
The time limit for the payment of Service Tax as follows
1. by the 6th day of immediately following calendar month if the duty is
deposited by electronically through internet banking and
2. by the 5th day of immediately following calendar month in any other case.
3. In case of individuals and partnership firms whose aggregate value of
taxable services provided from one or more premises is fifty lakh rupees or
less in the previous financial year, the service provider shall have the
option to pay tax on taxable services provided or agreed to be provided by
him up to a total of rupees fifty lakhs in the current financial year, in which
payment is received

Who is liable to pay service

tax ?
The person who provides the taxable service on receipt
of service charges is responsible for paying the Service
Tax to the Government.
However, in the following situations, the receiver of the
Services is responsible for the payment of Service tax:
Where taxable services are provided by Foreign Service
providers with no establishment in India, the recipient
of such services in India is liable to pay Service Tax.
For the services in relation to Insurance Auxiliary
Service by an Insurance Agent, the Service Tax is to be
paid by the Insurance Company

 For the taxable services provided by a Goods Transport Agency

for transport of goods by road, the person who pays or is liable
to pay freight is liable to pay Service Tax, if the consignor or
consignee falls under any of the seven categories viz.
a factory
a company
a corporation
a society
a co-operative society
a registered dealer of excisable goods
a body corporate or a partnership firm
For the taxable services provided by Mutual Fund Distributors in
relation to distribution of Mutual Fund the Service Tax is to be
paid by the Mutual Fund or the Asset Management Company
receiving such service.

Service tax return

Every person liable to pay service tax shall himself assess
the tax and shall submit a half yearly return in From ST-3 or
ST-3A in case of provisional assessment as the case may for
the months covered in the half-yearly return. Every
assessed shall submit the half yearly return by the 25th of
the month following the particular half-year.
The half years for this purpose will cover
1st half year 1 April to 30 September due date for the
return is 25 October
2nd half year 1 October to 31st march due date for the
return is 25 April

Late filling of return

Where the return is furnished after the date prescribed for
submission of such return, the person liable to furnish the said
return shall penalty for the period of delay of as
1. fifteen days from the date prescribed for submission of such
return, an amount of five hundred rupees;
2. beyond fifteen days but not later than thirty days from the date
prescribed for submission of such return, an amount of one
thousand rupees; and
3. beyond thirty days from the date prescribed for submission of
such return an amount of one thousand rupees plus one hundred
rupees for every day from the thirty first day till the date of
furnishing the said return:
. The total amount of penalty for delayed submission of return,
shall not exceed Rs.20,000/- i.e., maximum penalty is penalty as
calculated above or Rs.20,000/- whichever is lower.

6. Register for VAT / Sales Tax

VAT & Sales Tax

Value Added Tax (VAT)
VAT is a multi-point destination based system of taxation,
with tax being levied on value addition at each stage of
transaction in the production/ distribution chain.
The term 'value addition' implies the increase in value of
goods and services at each stage of production or transfer
of goods and services.
VAT is a tax on the final consumption of goods or
services and is ultimately borne by the consumer.

The State Governments, through Taxation Departments, are carrying out

the responsibility of levying and collecting VAT in the respective States.
While, the Central Government is playing the role of a facilitator for the
successful implementation of VAT.
The entire design of VAT with input tax credit is crucially based on
documentation of tax invoice, cash memo or bill. Every registered dealer,
having turnover of sales above an amount specified, needs to issue to the
purchaser serially numbered tax invoice with the prescribed particulars.
This tax invoice is to be signed and dated by the dealer or his regular
employee, showing the required particulars. For identification/ registration
of dealers under VAT, the Tax Payer's Identification Number (TIN) is
used. TIN consists of 11 digit numerals throughout the country. Its first two
characters represent the State Code and the set-up of the next nine
characters can vary in different States.

Sales Tax
Sales tax is levied on the sale of a commodity, which is produced or
imported and sold for the first time. If the product is sold subsequently
without being processed further, it is exempt from sales tax.
Sales Tax is a levy on purchase and sale of goods in India and is levied
under the authority of both Central Legislation (Central Sales Tax) and
State Governments Legislations (Sales Tax). The government levies Sales
Tax principally on intra-state sale of goods. States also levy tax on
transactions which are "deemed sales" like works contracts and leases.
In addition to Sales Tax, some states also levy additional tax, surcharge,
turnover tax and the like. Ordinarily, Sales tax is recovered from the buyer
as a part of consideration for sale of goods.

 Sales tax is paid by every dealer on the sale of any goods made by him in the
course of inter-state trade or commerce, despite the fact that no liability to tax
is raised on the sale of goods under the tax laws of the appropriate state.
Sales Tax ID number
A state Sales Tax ID number is essentially a business version of your Social
Security number, under which you collect and pay tax for any service or
product you sell, which in turn, qualifies for taxation in your state.
The rule of thumb for Sales Tax is that most services are exempt and most
products are taxable except for food and drugs, though recent history reflects
that states have been gradually adding to the list of services that are taxable.

7. Excise Duty

WHAT IS EXCISE DUTY?

An excise duty is a type of tax charged on goods
produced within the country (as opposed to customs
duties, charged on goods from outside the country)
It is a tax on the production or sale of a good
Source of revenue for government to provide public
service

EXCISABLE GOODS
Goods become excisable if and only if it is
mentioned in the Central Excise Tariff Act 1985
Goods must be movable. Duty cannot be levied
on immovable property .Central excise duty
cannot imposed on plant and machinery
Goods must be marketable .The goods must be
known in the market and must be capable of
being bought or sold

TYPES OF CENTRAL EXCISE DUTIES

Basic
Excise Duty, imposed on all excisable goods other than salt produced
or manufactured in India This duty is levied at the rates specified in
the First schedule to Central Excise Tariff Act 1985
Special
Some commodities like pan masala and cars have special excise
duties levied on them .These items are covered under in schedule II
to the Central Excise Tariff
Additional
Charged on goods listed in schedule III. This tax is shared between
the central and state governments and charged instead of sales tax .

LIABILITY FOR CENTRAL EXCISE

For condition must be present for the charge
of central excise duty:
1.The duty is on goods
2.The goods must be excisable
3 .The goods must be manufactured or
produced
4.Such manufacture or production must be
take place in India

WHO IS LIABLE TO PAY EXCISE DUTY?

The liability to pay tax excise duty is always on the
manufacturer or producer of goods.

There are three types of parties who can be considered as

manufacturers:
1. Those who personally manufacture the goods in question
2. Those who get the goods manufactured by employing
hired labor
3. Those who get the goods manufactured by other parties

9. Customs Duty

What is Custom Duty?

Custom duty is a variant of indirect tax and
is applicable on all goods imported and a
few goods exported out of the country.
Duties levied on import of goods are termed
as import duty while duties levied on
exported goods are termed as export duty.
Countries around the world levy custom
duties on import/export of goods as a means
to raise revenue and/or shield domestic
institutions from predatory or efficient
competitors from other countries.

Cont
Customs duty is levied as per the value of
goods or dimensions, weight and other such
criteria according to the goods in question. If
duties are based on the value of goods, then
they are called as ad valorem duties, while
quantity/weight based duties are called
specific duties. Compound duties on goods
are a combination of value as well as various
other factors.

Types of Custom Duty

Basic Custom Duty
Additional Customs Duty
This duty is levied on imported items under
Section 3 of Customs Tariff Act, 1975. It is
equal to the Central Excise Duty that is
levied on similar goods produced within
India.
Protective Duty
Protective duty may be imposed to shield
the domestic industry against imports at a
rate
recommended
by
the
Tariff
Commissioner.

 Anti-dumping Duty
Anti-dumping duty may be imposed if the
good being imported is at below fair market
price, and is limited to the difference
between export and normal price (dumping
margin).

Safeguard Duty
Safeguard duty is levied if the government
feels that a sudden increase in exports can
potentially damage the domestic industry.

 Online Custom Duty

Online custom duty is available from
ICEGATE or Indian Customs Electronic
Commerce/Electronic
Data
Interchange
(EC/EDI) Gateway. This portal allows e-filing
services to clients of Customs Department
including
trade
and
cargo
carriers,
collectively known as Trading Partner.
ICEGATE offers services such as electronic
filing of Bill of Entry, Shipping Bills, and
other related messages between customs
and the trading partner through e-mail, FTP
and web-upload.

cont
Shipping and airline agents can file
manifests through this portal, while cargo
logistics and custodians are able to interact
with customs EDI for logistics and cargo
related information. Apart from e-filing, this
portal allows e-payment, document tracking,
online registration for IPR, IE code status,
verification of DEPB/EPCG/DES licenses, PAN
based CHA data etc. There is a 24x7
helpdesk for all the trading partners to solve
issues and collect information.

Custom Duty Rates

Custom duty rates can be specific (rupees per unit) or
ad valorem (percentage of value). In general, duty
varies anywhere from 0% to 150%, with the average
rate lying around 11.90%. There is also a list of goods
that are exempted from custom duty.
Other fees related to custom duties include:
Landing Charge (LC) 1% CIF
Countervailing Duty (CVD) (0%, 6% or 12% (CIFD +
LC))
CEX (Education and Higher Education Cess) 3% CVD
CESS (Education + Higher Education) 3% (Duty +
CEX (Education and Higher Education Cess) + CVD)
Additional CVD 4% (CIFD + LC + CVD + CESS +
CEX)

 Employee Provident Fund

Provident Fund

A provident fund is created with a purpose of

providing financial security and stability to employee
its purpose is to help employee save a fraction of
their
salary every month.
The objective of the act is to secure sickness,
maternity and medical benefit to employee of
factories.

Who is applicable
If any employer has equal to or more
than 20 employees, it is mandatory
for him to join employee provident
fund scheme.
If any employees salary exceed Rs
6,500 per month , he has the option
to join scheme.

Benefits
Sickness and extended sickness
benefits
Maternity benefits
Dependants benefits
Medical benefits
Funeral benefits

Contribution
Employer :
8.33% on basic + DA

It is to be noted that where the pay

of the member exceed Rs 6,500/- per
month the contribution payable by
the employer will be limited to the
amt.

The employee provident fund Act came in

to force on 4th march 1952.
Presently the following three scheme are in
operation under the acts:
1. Employees provident fund scheme
1952.
2. Employees deposit linked insurance
scheme 1976.
3. Employees pension scheme 1995.

 Employee State Insurance (ESI)

Scheme

ESI Scheme
ESI Scheme for India is an integrated
social security scheme tailored to
provide Social Production to workers
and their dependents, in the
organised sector, in contingencies,
such as Sickness, Maternity and
Death or Disablement due to an
employment injury or Occupational
hazard

COVERAGE
The ESI Act 1948 applies to
Non seasonal Factories using power in
and Employing ten (10) or More persons
Non seasonal and non- power using
factories and establishments employing
twenty(20) or more persons
Employees
of
the
Factories
and
Establishments in receipt of wages not
exceeding Rs.7500 /- Per month are
covered under this Act.

Contribution & Benefit Period

Employees covered under the ESI Act, are
required to pay contribution towards the
scheme on a monthly basis. A contribution
period means a six month time span from 1st
April to 30th September and 1st October to
31st March.
Cash benefits under the scheme are
generally liked with contributions paid. The
benefit period starts three months after the
closure of a contribution period. The two
type of periods are elucidated below.
Contribution Period
Benefit
Period
1st April to 30th September
1st January to
30th June

ADVANTAGES OF EMPLOYERS
1. Employers are absolved of their
liabilities
of
providing
medical
facilities to employees and their
dependents in kind or in the form of
fixed cash allowance, reimbursement
of actual expenses, lump sum grant
or opting for any other medical
insurance policy of limited scope
unless it is a contractual obligation of
the employer

Benefits to Employees
ESI Scheme Major Social Security Benefits
in Cash and Kind include
1.
2.
3.
4.

Medical Benefit for self & Family

Sickness Benefit for self
Maternity Benefit - for self
Disablement Benefit
a). Temporary Disablement Benefit for
self
b). Permanent Disablement Benefit for
self
5. Dependents Benefit for dependents in
case of death due to employment injury

Benefits to Employees
In addition, the Scheme also provides
some other need based benefits to
insured workers. These are:
i). Funeral Expenses to a person who
performs the last rites of IP
ii). Rehabilitation allowances for self
iii). Vocational Rehabilitation - for self
iv). Old age Medicare for self and
spouse
v). Medical Bonus for insured women
and

Medical Benefit
Medical Benefit means Medical care of IPs
and their families, wherever covered for
medical benefit.
The Standard medical care consists of outdoor treatment, in-patient treatment, all
necessary
drugs
and
dressing,
pathological and radiological specialist
consultation and care, ante-natal and post
natal care, emergency treatment etc.,
Out-door medical care is provided at the
state Insurance Dispensaries or Mobile
Dispensaries manned by full-time doctors
(service system) or at the private clinics
of Insurance Medical Practitioners (Panel
System)

Medical Benefit
Insured worker and members of his family are
eligible for medical care from the very first day of
the worker coming under ESI Scheme.
A worker who is covered under the scheme for
first time is eligible for medical care for the period
of three months. If he/she contributes at least for
78 days in a contribution period the eligibility is
there up to the end of the corresponding benefit
period.
A worker is also eligible for extended sickness
benefit when he/she is suffering from any one of
the long term 34 diseases listed in the Act. This is
admissible after the worker has been under ESI
these conditions are satisfied medical benefit is
admissible for a maximum period of 730 days for
the IP and his/ her family.

Sickness Benefit
Sickness signifies a state of health
necessitating Medical treatment and
attendance and abstention from work on
Medical grounds. Financial support
extended by the corporation is such a
contingency is called sickness Benefit

Sickness Benefit represents periodical

payments made to an Insured Person for
the period of certified sickness after
completing
9
Months
in
insurable
employment.

Benefits to Employees
To qualify for this benefit, contributions
should have been payable for atleast 78
days in the relevant contribution period.
The Maximum duration for availing
sickness Benefit is 91 days in two
consecutive benefit periods
Standard benefit rate this rate
corresponds to the average daily wage of
an
Insured
person
during
the
corresponding contribution period and is
roughly half of the daily wage rate.

Extended Sickness Benefit

Extended Sickness Benefit is a Cash
Benefit paid for prolonged illness
(Tuberculosis / Leprosy, Mental and
Malignant diseases) due to any of the
34 Specified diseases
The IP should have been in
continuous employment for a period
of 2 years and should have
contributed for atleast 156 days in 4
preceding contribution periods

Maternity Benefit

Medical Bonus
Medical Bonus is lump sum payment
made to an Insured woman or the
wife of an insures person in case she
does not avail medical facility from
an ESI hospital at the time of delivery
of a child. This bonus of Rs. 250/- has
been increased to Rs. 1000/- from 1st
April 2003

Disablement Benefit
a). Temporary disablement benefit :
In case of temporary disability arising out
of an employment injury or occupational
disease.,
Disablement benefit is
admissible to
insured person for the entire period so
certified by an Insurance Medical officer /
Practitioner for which IP does not work for
wages.
The benefit is not subject to any
contributory condition and is payable at a
rate which is not less than 70% of daily
average wages.
However, not payable if the incapacity

Permanent disablement benefit

Commutation of periodical payments
into lump sum (one time payment) is
permissible where the permanent
disablement stands assessed as final
and daily rate of benefit does not
exceed Rs. 1.50. per day.
Commutation
of
Permanent
Disablement Benefit into lump sum
payment is also allowed in case the
total commuted value does not
exceed Rs.10000/- (The ceiling is
now being raised to Rs.30000/-).