Table of Contents
Introduction
Gumasta license is also known as the Shop and Establishment act License, which is a license required for the establishment of new commercial functioning in India. It means Gumasta license or Shop and Establishment act License is a basic or required registration for the establishment of any kind of business in India and which get registered with the municipality of a state.
The Municipal Corporation of every state provides a certificate that legally allows a business to enact its work in its shop. In simple words, it is the essential registration of a business in the eye of law or municipality.
However, Gumasta license recognizes a business for the various purposes of any government or bank. For example, a Gumasta license holder can get advantages in tax subsidies from the Government.
According to Maharashtra or Gujarat Law related to the Gumasta license, it is necessary for all the businesses which have 10 or more workers in a shop or establishment.
Moreover, according to the Maharashtra shop and establishment act, 2017, if a business fails to obtain Gumasta license then it raises heavy penalties and punishment on that business or establishment.
Procedure for obtaining a Gumasta License
This registration can proceed online:
- You have to visit the website of the repetitive Municipal corporation;
- Then fill the form under the Shops and Establishment section and submit it;
- Then Challan number will generate and necessary fees to be paid to get the UTR number;
- Then take the print of the form and submit it to the Shop License Department of the Municipal Corporation with the required documents.
- Then the appointed officer will verify it and provide the license after the inspection of the shop or establishment.
Moreover, this registration has to be done within 30 days of the starting of the business or establishment. The required registration fee is based on the total of employees of the Business according to the municipal corporation.
Documents required for the Registration
- Firstly, in the case of general:
- Id proof with photo,
- Copy of Address proof,
- Business registration letter,
- Property ownership proof/ NOC/ Rent agreement.
- Secondly, in the case of a partnership firm:
- Partnership Deed,
- PAN Card of the Partnership Firm
- Identity proof or address proof of the partners
- Fees of the partnership firm
- Thirdly, in the case of a private company:-
- Address or Id proof of the Partners,
- MOA or AOA of the Company.
Application form
The form contains the following information for the License:
- Name of the Employer,
- Name and address of the Establishment,
- Number of Employees,
- Pan card of the business owners or business,
- Detail of every employee,
- Ownership proof, if the property for business is on rent then Rental proof,
- Any other specific detail according to the respective Municipal Corporation.
Approval or Inspection for the Gumasta License
The Chief Inspector appointed the municipal corporation to verify the application form and all the submitted documents. Then the Inspector inspects the property of the Shop or Establishment if required. And when he/she is satisfied, the Inspector issues the registration certificate to the business. Moreover, the Gumasta license should be displayed at the shop or Business.
Time Period for Renewal
The validity of Gumasta license is for a period of 5 years. After the ending of the validity, the renewal of the license is mandatory. Therefore, the license should be renewed according to the Shop and Establishment Act or the respective Municipal Corporation. For the purpose of renewal, the renewal application must be submitted 30 days prior to the expiry date of the license.
Additionally, if the business delays in the process of renewal of the gumasta license then the business is liable to pay new fees which have the renewal fees with the additional 50 % of the Gumasta license fees. It means you have to pay the additional 50% of your renewal fees with your main renewal fees.
Closure or Cancellation of Gumasta License
If any establishment is going to shut down then the business or establishment the occupier must inform the Chief Inspector (Who is in charge by the Municipality Corporation) within 15 days prior to the closing in writing. Then the inspector verifies or inspects the request of the cancellation with the Gumasta license and after the mandatory proceedings, the Inspector will cancel or remove the license by the register.
Why any business needs it?
First of all, if any business has a legal license for their actions, then it is an advantage for that business to perform its task. In Maharashtra, this Gumasta license is mandatory to start a business or shop. Moreover, there are some following advantages of having a Gumasta License:
- It is legal proof of the business, which gives the right to perform the business activities to the business or establishment;
- It is also required as the business proof by the banks for the opening of the business bank account;
- If a business has gumasta license, then he can get the benefit and tax subsidies by the Government schemes;
- If the business established in Maharashtra, then the business cannot be registered for the GST in Maharashtra without the Gumasta license; And many more benefits the business can get by having the Gumasta license.
Conclusion
The Gumasta license or Shop and Establishment act license is the essential license for the new business establishment in India, which is provided by the Municipality Corporation of each state with their rules of state’s own shop and establishment acts. It is mandatory for all the new establishments, which have 10 or more employees. And if the business does not have the Gumasta or Shop and Establishment act License, then the business is liable for the penalty or punishment according to the law. And if you are intending to start a new business or shop in Maharashtra, then it is essential for you to have the Gumasta license for the establishment. The Gumasta license owner has some advantages like legal recognition, tax subsidies, and many more government schemes.
Moreover, Gumasta license is mandatory for the GST registration in Maharashtra and it is also essential as the business proof in most banks for the opening of the new bank account. Hence, if you are willing to open a new business or establishment, Gumasta License is the essential thing for you and if you are willing to start the business in Maharashtra, then Gumasta license is mandatory.
REFERENCES
- Maharashtra Shop and Establishment Act, 2017.
- Maharashtra Shop and Establishment Act, 1948.
- Gujarat Shop and Establishment Act, 2020.
- https://cleartax.in/s/gumasta-license/
This article is authored by Mayank Dube, student at Vidhyasthali Law College, Jaipur
The views and opinions expressed in this article are those of the author and do not reflect the views and opinions of Legally Flawless or its members.
