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How to apply for Shop and Establishment Licence — complete 2026 guide
Quick answer. Every commercial establishment in India — shop, office, restaurant, hotel, godown, IT firm, factory with fewer than 10 workers — must register under the state's Shops and Establishments Act (often called Gumasta in Maharashtra and Gujarat). The Labour Department of each state issues this licence. Apply online: Maharashtra lms.mahaonline.gov.in, Karnataka labour.karnataka.gov.in, Delhi labourcis.nic.in, Tamil Nadu labour.tn.gov.in, Uttar Pradesh shrameuparjan.in. Fee ranges from ₹150 to ₹15,000/year depending on number of workers and state. Most states are now self-certification with deemed approval in 7-30 days under the Right to Service Act. Validity: 1-5 years; renewal mandatory. Display the licence at the establishment entrance — it's a statutory requirement under §6 of every state Act.
Mahesh's story — "Garment shop on Rajmarg, licence in 19 days"
Mahesh Solanki, 33, garment shop owner in Surat. Opened his retail shop “Khushi Fashions” on Rajmarg with 3 employees in April 2025.
“I had been a salesman for 8 years and finally took the plunge — rented 320 sq ft on Rajmarg, paid 6 months' deposit, got the GST done, ordered stock from Ahmedabad. The CA who set up GST asked me 'Gumasta liya kya?' I said no, what is that. He explained — without it, my GST registration was technically incomplete, the bank wouldn't open a current account in the shop's name, and I couldn't tie up with wholesale suppliers who wanted a labour-licence copy. I went to labour.gujarat.gov.in that night, filled the Gujarat Shops and Establishments Act online form, uploaded my PAN, Aadhaar, rent agreement, electricity bill, photo of the shop signage, and list of 3 employees with their Aadhaar numbers. Fee was ₹500 for 3 employees for 1 year, paid online. Got the application number same day. Two weeks later a labour inspector came on a Wednesday afternoon — checked the shop, asked who the staff were, looked at my display board, asked if I had a first-aid box (I didn't, he said get one) and left. Five days after that — total 19 days from application — the digital licence came on email and I downloaded it from the portal. Total cost ₹500 fee + ₹150 first-aid box + 19 days. I got it laminated and put it on the shop wall above the cash counter. The bank current account opened the next week with that licence as proof. Two months later, when GST officials came for verification, the inspector asked for the Gumasta — I just pointed at the wall.”
—Mahesh, Surat, July 2025
About 6.4 crore commercial establishments are estimated to be operating in India (MSME Annual Report 2024-25). Of these, roughly 3.8 crore are formally registered under their state Shops and Establishments Act — the rest operate informally and are routinely caught at GST verification, bank account opening, or labour inspection. The licence is a one-time chore that unlocks GST verification, current account opening, FSSAI tie-ups, MSME Udyam registration cross-linking, and supplier onboarding.
What this is — and who needs it
The Shops and Establishments Act is a state-level law that regulates conditions of work in commercial establishments — opening / closing hours, weekly off, leave, overtime, women's working hours, employment of children, and basic welfare facilities. Every state has its own Act:
- Bombay (Maharashtra) Shops and Establishments Act 1948 — replaced by the Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017.
- Karnataka Shops and Commercial Establishments Act 1962.
- Delhi Shops and Establishments Act 1954.
- Tamil Nadu Shops and Establishments Act 1947.
- Gujarat Shops and Establishments (Regulation of Employment and Conditions of Service) Act 2019 — replaced the 1948 Act.
- Uttar Pradesh Dookan Aur Vanijya Adhishthan Adhiniyam 1962.
- West Bengal Shops and Establishments Act 1963.
- Telangana Shops and Establishments Act 1988.
- Other states have their own variants — Andhra Pradesh, Rajasthan, MP, Bihar, Kerala, Punjab, Haryana, etc.
Every state Act has the same basic compliance: registration within 30 days of starting business is mandatory under §6 (or equivalent section) of the relevant Act.
Who must register:
- Any shop — retail or wholesale, including online-only shops with a physical office / warehouse.
- Any commercial establishment — office, agency, broker, professional firm (CA / lawyer / consultant), bank (private), insurance office, IT / ITES firm.
- Any restaurant, hotel, lodging, café, bar, theatre, cinema.
- Any godown / warehouse / cold storage.
- Any factory employing fewer than 10 workers (with power) or fewer than 20 workers (without power) — above these thresholds, you need a Factory Licence under the Factories Act 1948 instead.
Who is exempt (varies by state):
- Establishments owned by central / state government and local authorities.
- Establishments engaged in family-only business with no hired employees (in some states like Karnataka).
- Educational institutions and charitable establishments (in many states).
The licence has no relation to whether your business is profitable, GST-registered, or MSME-registered — it is a labour-law registration tied to the physical premises and number of workers.
Step-by-step process
Step 1 — Confirm which state Act applies
The Act applies based on the state where your premises is located, not where you live or where the company is headquartered. A Bengaluru-headquartered company with a branch office in Mumbai needs:
- Karnataka Shops Act licence for the Bengaluru office, and
- Maharashtra Shops Act licence for the Mumbai office (separate application, separate fee).
If you have multiple branches in the same state but different cities, most states require separate registration per premises (Maharashtra, Karnataka), while a few allow consolidated registration under the head office.
Step 2 — Identify your state Labour Department portal
- Maharashtra: https://lms.mahaonline.gov.in (Labour Management System).
- Karnataka: https://labour.karnataka.gov.in → e-Karmika.
- Delhi: https://labourcis.nic.in.
- Tamil Nadu: https://labour.tn.gov.in.
- Gujarat: https://labour.gujarat.gov.in.
- Uttar Pradesh: https://shrameuparjan.in.
- Telangana: https://labour.telangana.gov.in.
- West Bengal: https://wblabour.gov.in.
- Kerala: https://lc.kerala.gov.in.
- Rajasthan: https://lablaws.rajasthan.gov.in.
If your state isn't in the list, search “[state name] labour department shops establishment registration”.
Step 3 — Gather the documents
Standard set across states:
- PAN of the proprietor / partnership firm / LLP / Pvt Ltd company.
- Aadhaar of the proprietor / authorised signatory.
- Address proof of premises — registered rent agreement (preferred; ₹100 stamp paper is acceptable in most states), property tax receipt, electricity bill (in the establishment's name where possible), or sale deed.
- Photograph of the premises showing the signboard with the establishment's name.
- Photograph of the proprietor / authorised signatory.
- List of all employees with name, age, gender, designation, date of joining, monthly wage. Most portals have a built-in form.
- Working hours and weekly off schedule — state's Act caps daily hours (typically 9-10 hours) and total weekly hours (48-50). Weekly off mandatory.
- Leave policy — most state Acts require minimum 18 paid leave days/year + national/festival holidays.
- GST registration (if turnover crosses GST threshold; not always mandatory at this stage).
- Incorporation certificate (Pvt Ltd / LLP / partnership deed for partnerships).
- Authorisation letter / board resolution if applying through an authorised signatory.
Step 4 — Fill the online application
- Register on the state portal with mobile + email + OTP.
- Choose “Shop & Establishment Registration / Renewal”.
- Fill: establishment name, address, nature of business, NIC code (industry classification), date of commencement, number of male / female employees, manager's name.
- Upload all documents (PDF, < 1-2 MB each, name them clearly).
- Pay fee online (UPI / debit / net banking).
Step 5 — Inspector verification (if applicable)
- Self-certification states (Maharashtra, Gujarat, Karnataka for shops with ≤10 workers, Delhi for IT/ITES) — no inspection; deemed approval within 7-15 days.
- Inspection states — Labour Inspector visits the premises within 7-21 days. Be ready with: (a) attendance register / wage register / leave register, (b) first-aid box, © drinking water, (d) display of basic notices (Shop Act notice + working hours + weekly off + employee list).
- Cooperative behaviour saves time. Inspectors are looking for basic compliance, not perfection.
Step 6 — Receive the digital licence
- Maharashtra issues Form-A digital licence with QR code, downloadable from the portal.
- Karnataka issues e-Karmika certificate.
- Delhi issues Form-K with seal.
- Tamil Nadu issues Form-IV.
- The licence has: registration number, establishment name, address, validity period, number of workers permitted.
Step 7 — Display + downstream uses
- Display the licence at the establishment entrance — mandatory under §6 / §7 of every state Act. Failure to display attracts ₹500-₹5,000 penalty.
- Use it as proof for: opening a current account in the shop's name, GST verification visit, applying for FSSAI licence (see Apply FSSAI food licence), applying for trade licence with municipal corporation, supplier KYC.
- Update the state portal within 15-30 days of any change: new employees joined / left, address change, change in nature of business, change in proprietor.
Step 8 — Renew on time
- Validity: typically 1 year (Maharashtra), 1-5 years (Karnataka), 5 years (Delhi), 1 year (TN).
- Most states allow online renewal 30 days before expiry. Same fee or a marginal increase.
- Late renewal fee: ₹500-₹2,000 + per-day penalty.
- Lapsed licence = unregistered establishment = full fresh application + penalty.
Sample fee + worker-count + state table
+-----------------------------------+--------------------------------------+ | Maharashtra (Bombay Act 2017) | 0 workers (proprietor only): ₹100/yr | | | 1-9 workers: ₹300-₹1,200/yr | | | 10-19 workers: ₹2,000/yr | | | 20-49 workers: ₹3,000-₹5,000/yr | | | 50+ workers: ₹6,000-₹15,000/yr | | | Validity: 1 year. Online via lms. | +-----------------------------------+--------------------------------------+ | Karnataka (1962 Act) | 0-9 workers: ₹300/yr | | | 10-19 workers: ₹600/yr | | | 20-49 workers: ₹4,000/yr | | | 50-99 workers: ₹8,000/yr | | | 100+ workers: ₹16,000/yr | | | Validity: 5 years. e-Karmika portal. | +-----------------------------------+--------------------------------------+ | Delhi (1954 Act) | All establishments: ₹2,500-₹25,000 | | | (one-time, slab on workers) | | | Validity: 5 years. | +-----------------------------------+--------------------------------------+ | Tamil Nadu (1947 Act) | 0-5 workers: ₹100/yr | | | 6-10 workers: ₹250/yr | | | 11-25 workers: ₹500/yr | | | 26-50 workers: ₹1,000/yr | | | 51+ workers: ₹2,000/yr | | | Validity: 1 year. labour.tn.gov.in. | +-----------------------------------+--------------------------------------+ | Gujarat (2019 Act) | 0-9 workers: ₹500/yr | | | 10-19 workers: ₹1,000/yr | | | 20+ workers: ₹2,000/yr | | | Self-certification, deemed approval. | +-----------------------------------+--------------------------------------+ | Uttar Pradesh (1962 Act) | Slab-based ₹40-₹500/yr (small shops) | | | Validity: 1 year. | +-----------------------------------+--------------------------------------+ | Telangana (1988 Act) | 0-5 workers: ₹100/yr | | | 6-10 workers: ₹300/yr | | | 11-20 workers: ₹600/yr | | | 21-50 workers: ₹1,000/yr | | | 51+ workers: ₹2,000/yr | +-----------------------------------+--------------------------------------+ | Right to Service Act SLA | Maharashtra 30 days, Karnataka 7 | | (max time for approval) | days, Delhi 30 days, TN 30 days, | | | UP 30 days, Gujarat 7 days. | +-----------------------------------+--------------------------------------+ | RTI to PIO state Labour Dept | ₹10 by IPO. BPL = free. | +-----------------------------------+--------------------------------------+
Common reasons your Shop Act application gets stuck
- Premises address proof unclear. Rent agreement on plain paper (not stamped), or in a different name from the applicant, or with a wrong address spelling. Fix: re-execute on Rs 100 stamp paper, register at SR if state mandates registration of leases.
- Rent agreement not registered. Maharashtra and Karnataka require registration of leases > 12 months under the Registration Act 1908; an unregistered long lease is treated as a leave-and-licence which is fine for Shop Act, but ambiguity stalls the file.
- Old building approval issues. Premises in an unauthorised colony / illegal construction → some Labour Inspectors refuse. This has no statutory basis in the Shops Act — push back; no Act says the building must be municipally approved for a labour licence.
- Partner / director changes not updated in MCA / state portal → mismatch between the applicant's name on PAN and the application. Fix: update MCA first.
- Renewal missed by > 90 days → application treated as fresh + late penalty. Avoid by setting a renewal calendar reminder.
- Multiple branches without separate licence — common audit finding. One licence per branch / premises in most states.
- NIC code mismatch — picking the wrong industry code can route the application to the wrong cell. Check the National Industrial Classification 2008 list.
- Inspector not visiting despite paying fee — common in tier-2 cities. RTI on inspector's visit log is the cleanest fix.
- Inspector demanding “speed money” — refuse, get the deficiency in writing under RTPS Act, escalate to the Labour Commissioner; parallel ACB complaint.
If stuck — the escalation ladder
Rung 1 — Labour Inspector (zonal)
- Walk into the zonal Labour Inspector's office, ask for the dealing clerk, get the file number.
- Most stuck files are stuck on a missing photocopy — fixable in 30 minutes.
Rung 2 — Assistant / Deputy Labour Commissioner (district)
- Each district has an Assistant Labour Commissioner who supervises Inspectors.
- Written grievance with file number; ALC can direct action within 7-15 days.
Rung 3 — Labour Commissioner of the state
- Maharashtra Labour Commissioner: 022-22657725; Karnataka: 080-22253292; Delhi: 011-23438084; TN: 044-25340622.
- Written representation; CC by email; physical receipt.
Rung 4 — Right to Service Act
- Shops Act registration is a notified service in 22 states. Maharashtra: 30 days; Karnataka: 7 days; Delhi: 30 days; TN: 30 days; UP: 30 days; Gujarat: 7 days.
- If SLA missed, file an appeal with the designated Appellate Authority — usually the Joint Labour Commissioner. Penalty up to ₹5,000-₹20,000 on the defaulting officer + compensation.
Rung 5 — CPGRAMS
- https://pgportal.gov.in → Ministry of Labour & Employment OR your state government → Labour Department.
- Auto-routed; visibility helps move the file.
Rung 6 — Right to Information (RTI)
The state Labour Department, Labour Commissioner's office, and every Labour Inspector are public authorities under §2(h) of the RTI Act 2005.
RTI helps here when:
- Your application has been pending for more than the State RTPS SLA — RTI to PIO Labour Department asks: “Status of Shop & Establishments registration application no. [X], dated [date]? Name and designation of dealing officer? Date of inspection if scheduled? Reasons for delay if any? Date by which licence will be issued?” — written reply within 30 days.
- Inspector visited and gave an oral observation — RTI for the inspection report copy.
- Application rejected without reasons — RTI for a copy of the rejection order with grounds and the file noting.
- Premises inspected on a date you weren't aware of — RTI for the inspector's visit log + photos taken.
- Same-day deemed-approval not honoured (Karnataka, Gujarat) — RTI showing the application date and SLA missed builds your appeal.
- Renewal application stuck — same template, replace “registration” with “renewal”.
RTI does NOT help here when:
- You filed last week — wait the State RTPS SLA before sending an RTI; premature RTIs get the reply “under processing”.
- You disagree with the fee slab — fees are notified by state Labour Department; RTI cannot reduce the fee, but it can confirm the correct slab for your worker count.
- You want the Labour Commissioner to issue the licence — RTI gives you information; for the licence, use RTPS appeal / writ petition.
- Personal information about other establishments / their inspection — protected under §8(1)(d) and §8(1)(j) of the RTI Act unless larger public interest can be shown.
- For pure labour disputes (wage non-payment / overtime / harassment) — those go to the Labour Court / Conciliation Officer, not RTI.
FAQs
Q. I work from home as a freelancer. Do I need a Shop Act licence?
Most state Acts exempt family-only no-employee activities. Karnataka explicitly exempts; Maharashtra is ambiguous. If you have any paid employee or you display the home as a commercial address (e.g., on a signboard or invoice), the Act applies. Safer to register at the lowest fee slab.
Q. I'm an IT consultant working from a co-working space. Who registers — me or the co-working operator?
Both. The co-working operator registers the premises under their own name. You register your business entity with the co-working address as your principal place. State portals accept co-working desk addresses with a no-objection letter from the operator.
Q. Do I need GST registration before Shop Act licence?
No — they are independent. Shop Act is labour-law registration; GST is tax registration. You can apply in any order, though most banks ask for both before opening a current account.
Q. What is “Gumasta licence” in Maharashtra and Gujarat?
“Gumasta” is colloquial — it is the same Shops and Establishments Act registration, named after the historical “gumasta” (manager / agent) who used to be the registered person under the original Bombay Shops Act 1948. Online portal is the same lms.mahaonline.gov.in for Maharashtra.
Q. Can my Shop Act licence be cancelled?
Yes — if you fail to renew, fail to comply with notices, are convicted of repeated violations of working-hours / leave / women-employment provisions, or if the premises is illegal. Cancellation needs a show-cause notice + opportunity to be heard.
Q. I'm closing my shop. Do I need to surrender the licence?
Yes — file a closure intimation within 15 days of closing on the same portal. Avoids future renewal-default penalties and unblocks GSTIN cancellation.
Q. My business is a home-based food unit. Shop Act or FSSAI?
Both, usually. Shop Act for the labour-law side; FSSAI for the food-safety side. See Apply FSSAI food licence.
Q. I just registered Udyam MSME. Does that cover Shop Act?
No. Udyam is an MSME classification for benefits; Shop Act is a labour licence. They are separate compliances. See Register Udyam MSME for the parallel registration. Many small businesses need both.
Q. Can a foreigner with an Indian PAN register a shop?
Yes, with valid visa + FRRO registration + an Indian PAN. The Shop Act doesn't bar foreign proprietors. RBI/FEMA and FDI rules govern the equity side; Shop Act covers the operational side.
Related on RTI Wiki
Last reviewed: 26 April 2026 by RTI Wiki editorial team. Shop & Establishments Act fees and procedures vary by state and are notified separately by each state Labour Department — verify on your state Labour Department portal or write to admin@bighelpers.in if you spot a stale figure.