{"id":3128,"date":"2020-02-11T09:00:17","date_gmt":"2020-02-11T09:00:17","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=3128"},"modified":"2020-12-22T16:09:45","modified_gmt":"2020-12-22T10:39:45","slug":"penalty-for-violating-the-trade-license-in-india","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/penalty-for-violating-the-trade-license-in-india\/","title":{"rendered":"Penalty for Violating the Trade license in India"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The government to ensure that no one is carrying out any unethical\nbusiness practices and no one is getting affected with the same, i.e. unethical\npractices made it necessary to obtain a trade license in India before starting\nthe business or trade. Every business person must obtain a trade license for\ndealing in trade activities.<\/p>\n\n\n\n<p>In the topic we will discuss the reason for obtaining the trade\nlicense, The Role of trade license is reducing the unethical practices, who can\nissue the trade license, its eligibility criteria and what are the penalties\nfor violating the trade license.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/penalty-for-violating-the-trade-license-in-india\/#What_is_a_Trade_License_in_India\" >What is a Trade License in India?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/penalty-for-violating-the-trade-license-in-india\/#Why_Trade_License_is_important_to_carry_out_the_business_activity\" >Why Trade License is important to carry out the business activity?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/penalty-for-violating-the-trade-license-in-india\/#Key_points_to_be_kept_in_mind_before_Issuing_Trade_License_in_India\" >Key points to be kept in mind before Issuing Trade License in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/penalty-for-violating-the-trade-license-in-india\/#Issuing_Authority_of_Trade_license_in_India\" >Issuing Authority of Trade license in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/penalty-for-violating-the-trade-license-in-india\/#Why_before_starting_any_business_activity_it_is_important_to_apply_for_Trade_License\" >Why before starting any business activity it is important to apply for Trade License?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/penalty-for-violating-the-trade-license-in-india\/#Departments_where_Trade_license_is_issued_by_the_Authority\" >Departments where Trade license is issued by the Authority<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/penalty-for-violating-the-trade-license-in-india\/#How_to_get_a_Trade_License_in_India\" >How to get a Trade License in India?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/corpbiz.io\/learning\/penalty-for-violating-the-trade-license-in-india\/#Penal_provision_for_violating_the_Trade_License_in_India\" >Penal provision for violating the Trade License in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/corpbiz.io\/learning\/penalty-for-violating-the-trade-license-in-india\/#How_long_a_Trade_License_can_be_used_by_the_Applicant\" >How long a Trade License can be used by the Applicant?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/corpbiz.io\/learning\/penalty-for-violating-the-trade-license-in-india\/#Renewal_of_Trade_License_in_India\" >Renewal of Trade License in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/corpbiz.io\/learning\/penalty-for-violating-the-trade-license-in-india\/#Takeaway\" >Takeaway<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_a_Trade_License_in_India\"><\/span>What is a Trade License in India?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A\ntrade license is issued by the licensing department of the municipal\ncorporation in the form of a document\/certificate. Trade License permits the\nbusiness person to set up a particular trade or business in a distinct area. <\/p>\n\n\n\n<div class=\"shadow1\"><strong>Note:<\/strong>The Trade license in India allows the holder to do that particular trade or business for which it has been issued. Furthermore, Trade license does not offer any kind of property ownership to the person holding the license.<\/div>\n\n\n\n<p><strong><a href=\"https:\/\/corpbiz.io\/trade-license\">Trade license in India<\/a><\/strong> is issued by the Authority to keep a check on the areas by restricting the people from dealing in certain types of businesses from their places.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_Trade_License_is_important_to_carry_out_the_business_activity\"><\/span>Why Trade License is important to carry out the business activity?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Trade\nlicense is playing a vital role in balancing the society and to keep a check\nthat all the businesses are following the respective rules and regulations by\nadopting the safety measures. It protects the owners from the uncalled\nliabilities. Trade license attracts the customers as well as the investors. It\nhelps the person in doing ethical business practices by assuring safety\nmeasures. <\/p>\n\n\n\n<p><strong><em>The\nmain purpose of a trade license in India is as follows-<\/em><\/strong><\/p>\n\n\n\n<ul><li>To ensure that the customers shall not\nadversely be affected by the health issues due to improper trade of business.<\/li><li>To maintain the higher goodwill.<\/li><li>To attract more and more customer base and\ninvestor organization.<\/li><li>To ascertain the government as well as the customers\nthat the business practices are being carried reasonably and by following the\nprescribed rules and regulations.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_points_to_be_kept_in_mind_before_Issuing_Trade_License_in_India\"><\/span>Key points to be kept in mind before Issuing Trade License in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Before issuing the trade license and to carry out the legal business activities, the Licensing department of <strong><em>Municipal corporation<\/em><\/strong><sup><a rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\" href=\"https:\/\/en.wikipedia.org\/wiki\/Municipal_corporation\" target=\"_blank\"><em>[1]<\/em><\/a><\/sup><em> <\/em>will ensure that the-<\/p>\n\n\n\n<ul><li>The Applicant has attained the age of\n18 years,<\/li><li>No criminal records of the Applicant,<\/li><li>Permissibility of business on a legal\nbasis.<\/li><\/ul>\n\n\n\n<p>Trade license in India provides a permit to carry the business\nactivities for which it was issued by the Authority. A Trade license validates\nbusiness activities.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Issuing_Authority_of_Trade_license_in_India\"><\/span>Issuing Authority of Trade license in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Issuing Authority for the trade license is the licensing\ndepartment of the Municipal Corporation. However, the rules and regulations for\nthe issuance of trade license in India vary from state to state. A registered\nbusiness, i.e. a business with trade license enjoys more benefits in terms of\ncustomers and investors as compared to unregistered business. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_before_starting_any_business_activity_it_is_important_to_apply_for_Trade_License\"><\/span>Why before starting any business activity it is important to apply for Trade License?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Before commencing any business activity, it is of the utmost\nimportance to apply for a trade license as it acts as proof that the activities\nto be carried out by the Applicant will not result in any type of health problems.\nFurther, it also assures that the applicant company is not going to perform any\nsuch activity that would be considered unethical.<\/p>\n\n\n\n<p>Furthermore, the fee structure to get a trade license is regulated\nby the state in which the Applicant has applied for. The fees vary from state\nto state. It can be in the form of a certain set of amounts, or they may be calculated\nby the annual sales.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Departments_where_Trade_license_is_issued_by_the_Authority\"><\/span>Departments where Trade license is issued by the Authority<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Trade License is issued by the Municipal Corporation\u2019s License Department in different departments like <a href=\"https:\/\/corpbiz.io\/shop-establishment-license\"><strong>Shop and Establishment license<\/strong><\/a>, Industrial License and also Food establishment License-<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"581\" height=\"340\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/02\/image-1.png\" alt=\"Trade license\" class=\"wp-image-3162\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/02\/image-1.png 581w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/02\/image-1-300x176.png 300w\" sizes=\"(max-width: 581px) 100vw, 581px\" \/><\/figure><\/div>\n\n\n\n<p>Conclusively, three types of licenses are issued, i.e. Shop License, Industry License and Food establishment license in various departments. In metro cities, it takes approx. 7-10 days to execute the process of Trade license and in the case of rural and small cities, it takes a longer time to process the same.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/how-to-apply-trade-license-online-india\/\">Step By Step Guide For How to Apply Trade License Online<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_get_a_Trade_License_in_India\"><\/span>How to get a Trade License in India?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Obtaining\na trade license in India is a simple process.<\/p>\n\n\n\n<p><strong><em>The\nApplicant is required to follow the required steps to get the trade license-<\/em><\/strong><\/p>\n\n\n\n<ol><li>Submission of simple questionnaire along\nwith the requisite documents.<\/li><li>Registering the trade license with the\nrequisite documents. It takes approx. 12 working days to register the trade\nlicense<\/li><li>Submission of the documents to the\nrespective Authority. Once granted by the Authority, the same shall be sent to\nthe Applicant through courier.<\/li><\/ol>\n\n\n\n<p><strong><em>Documents required as an attachment-<\/em><\/strong><\/p>\n\n\n\n<ul>\n<li style=\"text-align: left;\">Id proof of the Applicant.<\/li>\n<li style=\"text-align: left;\">In case of rental premise, Lease document.<\/li>\n<li style=\"text-align: left;\">Address proof of the Applicant.<\/li>\n<li style=\"text-align: left;\">Cancelled cheque.<\/li>\n<li style=\"text-align: left;\">Certificate incorporation<\/li>\n<li style=\"text-align: left;\">PAN of the entity<\/li>\n<li style=\"text-align: left;\">Certificate of Occupation<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Penal_provision_for_violating_the_Trade_License_in_India\"><\/span>Penal provision for violating the Trade License in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Without\nobtaining a Trade License if a person starts a business, the government imposes\npenal provisions in the form of fees and penalties on such person.\nAdditionally, it also results in the shutdown of the business. In layman, if\nthe person starts the business and fails to comply with the rules and\nregulations set by the government and respective Authority, the said person\nwill be liable for the penalty as prescribed by the government.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_long_a_Trade_License_can_be_used_by_the_Applicant\"><\/span>How long a Trade License can be used by the Applicant?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A\ntrade license is valid for a period of 1 year. Renewal is required once the\nlicense gets expired. Every business needs a trade license and are required to\ncomply with the rules and regulations.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Renewal_of_Trade_License_in_India\"><\/span>Renewal of Trade License in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Trade\nlicense issued by the municipal Authority remains valid for one year and\nrequired to be renewed every year. Though, In India trade license is renewed between\nJanuary 1st to March 31st<\/p>\n\n\n\n<p>The\nrenewal application for the trade license is to be made within 30 days from the\ndate of its expiry. In case of delay in filing the renewal, application attracts\nfine depending upon the rules and regulation of the issuing Authority. <\/p>\n\n\n\n<p><strong><em>Documents required at the\ntime of renewal of trade license-<\/em><\/strong><\/p>\n\n\n\n<ul><li>Original copy of the trade License;<\/li><li>Challan of the previous year;<\/li><li>The Updated property tax paid receipt.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Takeaway\"><\/span>Takeaway<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Trade license is a license that provides approval to carry out the business activity. Any existing business involved in the trading activity can apply for a trade license, provided it shall be in the national limits. In case of denial of a trade license in India, the Applicant can appeal to the Standing committee. Violating the provisions of trade license results in the penal provision and the government can also seize or lock the business.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/online-trade-license-before-commencing-business-in-local-municipal-area\/\">Planning Business set up in Local Municipal Area; Trade License Should be the First Requirement<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The government to ensure that no one is carrying out any unethical business practices and no one is getting affected with the same, i.e. unethical practices made it necessary to obtain a trade license in India before starting the business or trade. Every business person must obtain a trade license for dealing in trade activities. [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":3150,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[232],"tags":[303],"acf":{"service_id":"89"},"authorName":"Priyanka Bajpayee","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/03\/IMG-20220303-WA0005.jpg","authorDescription":"A Company Secretary together with PG in international Business, she has gained significant experience as legal content writer. She has keen interest in doing research and writing on legal and financial subject matters. She also holds work experience in legal compliances.","postViews":24996,"readingTime":5,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/3128"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=3128"}],"version-history":[{"count":26,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/3128\/revisions"}],"predecessor-version":[{"id":22612,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/3128\/revisions\/22612"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/3150"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=3128"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=3128"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=3128"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}