Stressed about registering your company?
Get end-to-end services with Cleartax
Explore Now

Is Your Business Eligible Under the Shops And Establishments Act?

By Mayashree Acharya


Updated on: Dec 10th, 2021


7 min read

social iconssocial iconssocial iconssocial icons

The Shops and Establishment Act registration issued under the Shops and Establishment Act is mandatory for all persons, companies and legal entities planning to set up a commercial establishment or shop. In India, the State Legislation enacts the Shop and Establishment Act (Act), and thus it differs from state to state. 

However, the Shops and Establishment Act drafted by all states are similar in nature and regulate the working hours for employees, annual leaves with wages, compensation, employment of women and children, and other aspects of the commercial establishments and shops in their state.  

The registration under the Act is known by various names in different states. For instance, in Bihar, it is known as the Trade License; in Maharashtra, it is called Gumasta License; in Delhi, UP and Haryana, it is known as the Shop and Establishment license. 

Eligible Businesses Under the Shops and Establishments Act

As per the Shops and Establishments Act, the proprietor or owner of the shops and commercial establishments must obtain the registration. According to the Act, a commercial establishment means and includes:

  • Registered and unregistered charitable trusts or other trusts.
  • A society registered under Societies Registration Act, 1860.
  • An establishment that provides services or does office work. 
  • An establishment of a medical practitioner, legal practitioner, architect, accountant, engineer, tax consultant, contractors, auditors or any other professional or technical consultant.
  • Journalistic and printing establishments.
  • Educational or other institutes run for private gain.
  • Quarries and mines not governed by the Mines Act, 1952.
  • A premises where the business of insurance, banking, brokerage, stocks and shares is undertaken.
  • Cinemas and theatres. 
  • Restaurants, bakeries, hotels, cafes, clubs, refreshment houses and eating houses.
  • Public places of entertainment or amusement. 

In addition to the establishments mentioned above, the state government can declare additional establishments eligible to register under the Act.

Shops mean any premises where:

  • Business or trade is carried on where goods are sold, either wholesale or retail.
  • Services rendered to customers. 
  • Offices, godown, store-room, workplace or warehouse, whether in the same premises or otherwise, used in connection with the trade or business.

Exempted Businesses Under the Shops and Establishments Act

The Shops and Establishment Act exempt certain businesses, and thus the following establishments and shops are generally not required to obtain the Shops and Establishment Act registration: 

  • Offices under the Central Government, state governments, and local authorities, except commercial undertakings.
  • Any water transport service, railway service, telegraph or telephone service, postal, business, or undertaking supplies light, power, or water to the public.
  • Railway dining cars.
  • Establishments of the Food Corporate of India (FCI).
  • Establishments for the care or treatment of the infirm, sick, or mentally unfit.
  • Offices of a banking company.

The exemption for the business or establishments varies from state to state. Each state government has prescribed the exempted businesses or establishments under their state Shops and Establishments Act. Thus, the state government can declare additional businesses or establishments exempt from obtaining registration in addition to the establishments mentioned above.

The sections relating to opening and closing hours and weekly holidays of the Act does not apply to the following businesses:

  • Shops dealing in medical, medicines, or surgical appliances or requisites.
  • Clubs, boarding houses, residential hotels, hostels attached to colleges or schools.
  • Refreshment rooms and stalls at bus stands, railway stations, ports or airports.
  • Hairdressers and barbers shops. 
  • Shops dealing in fish, meat, eggs, poultry, bread, dairy produce, sweets, confectionery, ice-cream, chocolates, fruits, cooked food, vegetables, flowers, or green fodder.
  • Shops dealing in articles needed for burials, funerals, or cremations.
  • Shops dealing in the pan with beedies or cigarettes or liquid refreshments sold retail for consumption on the premises.
  • Shops dealing in periodicals or newspapers, offices of news agencies and editing sections of newspaper offices.
  • Theatres, cinemas, places of public entertainment, and stalls or refreshment rooms attached to theatres, cinemas, and places of public entertainment.
  • Establishments for the retail sale of petrol.
  • Shops in garrison shops, regimental institutes, and troop canteens in cantonments.
  • Tanneries.
  • Retail trade carried on at a show or exhibition if such retail trade is ancillary or subsidiary only to the primary purpose of the show or exhibition. 
  • Flour mills and oil mills not registered under the Factories Act, 1948.
  • Lime and brick kilns.
  • Information technology establishments.
  • Bio-technology and research centres or establishments of the epidemic and other diseases.

Shops and Establishments Act Registration Process

The registration process under the Act is as follows: 

  • The owner/proprietor of an establishment (applicant) must apply for the registration within 30 days of commencing the establishment. 
  • Each states’ labour department is responsible for processing and issuing the Shops and Establishment Act registration.
  • The applicant can obtain the registration form from the Chief Inspector under the Act (Chief Inspector) of the concerned area, fill it and submit it with the required documents. 
  • The applicant can also fill the form online on the state labour department website and submit the physical copy of the online application to the Chief Inspector.
  • The applicant must provide the following details of the establishment:
    • Name of the employer.
    • Name of the establishment.
    • Address of the establishment.
    • Category of the establishment.
    • Number of employees.
    • Date on which the establishment started working.
  • The applicant needs to pay the prescribed fees while submitting the application. The registration fee varies depending on the state where the shop or establishment is registered.
  • The Chief Inspector will check all the details, visit the establishment (if required), and provide a registration certificate valid for one to five years.
  • Usually, the district labour officer/labour commissioner is the Chief Inspector under the Act.
  • The applicant must display the registration certificate at the shop or establishment.
  • The applicant must renew the certificate before the expiry of its validity period.

Documents Required for Registration Under the Shops and Establishments Act

  • Photograph of the shop or establishment and its name board. 
  • Shop or establishment address proof.
  • Certificate of incorporation,  LLP agreement, partnership deed, Memorandum or Articles of Association.
  • PAN card of the proprietor.
  • ID proof of the proprietor.
  • Address proof of the establishment or shop.
  • Details of all employees.
  • Payment challan.

Disclaimer: The materials provided herein are solely for information purposes. No attorney-client relationship is created when you access or use the site or the materials. The information presented on this site does not constitute legal or professional advice and should not be relied upon for such purposes or used as a substitute for legal advice from an attorney licensed in your state.

inline CTA
Get an expert at affordable price
For ITR, GST returns, Company Registration, Trademark Registration, GST Registration
About the Author

I am an advocate by profession and have a keen interest in writing. I write articles in various categories, from legal, business, personal finance, and investments to government schemes. I put words in a simplified manner and write easy-to-understand articles. Read more


Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.

Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.

CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law.

Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Download Black by ClearTax App to file returns from your mobile phone.

Cleartax is a product by Defmacro Software Pvt. Ltd.

Company PolicyTerms of use


ISO 27001

Data Center


SSL Certified Site

128-bit encryption