Karnataka Shop and Establishment Act – A complete guide

Last Updated at: August 11, 2020
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Karnataka Shop and Establishment Act - A Complete Guide
In July 2020, the Karnataka Government announced that they are thinking about the removal of surprise inspections under 12 Acts, including the Shops & Establishment Act of 1965. This is said to improve the ‘ease of doing business’ rankings for the State. 

 

The Karnataka Shops And Commercial Establishments Act, 1961 is one of the state labour laws enforced by the Department of Labour. This act is valid all over the state of Karnataka from the date notified by the state government. This act provides regulations and other guidelines for work and employment in Shops and Commercial establishments inside the state of Karnataka.

According to this act, the “Commercial Establishment” means

  1. Commercial
  2. Trading
  3. Banking
  4. Insurance Company
  5. An Establishment or Administrative services.

If you’re just looking around for related information on startups, government registrations, tax or legal documentation, check out the list of services we provide to make your interaction with government as smooth as is possible by doing all the legal documentation for you. We will also give you absolute clarity on the process to set realistic expectations.

A person where he/she is employed mainly in office work, a hotel, a restaurant, boarding, a café or other refreshment places

A theatre or any other public amusement or entertainment.

6. The State government can also declare a specific space as a commercial establishment for this Act. 

Shops mean any premises or location where the business or trade is carried on where service is provided to the consumers. It includes offices, storerooms, godowns, warehouses, etc. It can be on the same premises or otherwise. But, this explanation does not include a commercial or shop attached to the factory where the employee comes under the scope of the Factories Act, 1948.

Apply for Shop and Establishment License

What are all the business exempt from the shop & establishment Act?

As per the act, the “exemption” means the businesses which have nothing to do with this act.

  1. Offices of Central and State Government or local authorities.
  2. Postal, railway, Telephone, water transport services
  3. Offices of a banking Company
  4. Railway Dining Cars
  5. A place to treatment or care for the sick or people who is mentally unfit.
  6. Establishment of Food Corporation of India (FCI)
  7. Offices of a banking
  8. Offices of legal and medical operations where only three persons are employed
  9. A shop mainly in medicines, surgical requisites or appliances.
  10. A person directly engaged in a clerk job responsible for the despatch of goods.

What are the features of the Karnataka Shop and Commercial Establishment Act?

  • Issuing Registration Certificate
  • Renewal of Registration Certificate
  • Facilitating changes in Registration Certificate
  • Issuing Duplicate Registration Certificate
  • Annual Returns Filing
  • Exemption or relief weekly holidays
  • Exemption for Women working in Night Shifts
  • Appeal submission

Duties of the owner:

  • Registration of the organisation
  • Weekly Holiday for the Establishment
  • Fixing Working Hours
  • Employment and Regulation
  • Records Management

How to register an establishment under this act?

For registration and renewal of establishment under the Karnataka Shop and Commercial Establishment Act, 1961 entrepreneurs can avail the e-Karmika online facility.

  • In case of a new registration, you should register the organisation within 30 days from the date of commencement of business.
  • In case of an existing organisation, you should register the organisation from the date on which this Act comes into force.
  • The registration certificate is valid for five years and it should be renewed before the expiry date by paying fees and in the manner prescribed.
  • The business owner should display the registration certificate in a place where everyone can see inside the office premises.
  • If you plan to change any information, such change should be notified in the prescribed format to the registration authority.
  • After closing the business establishment, the owner should submit the registration certificate to the authority.

What are the documents to be uploaded?

  • Address proof on the owner (Aadhaar Card/ Voter ID/ Driving License)
  • Incorporation Certificate/MoA (In case of Private Limited Company)
  • Self-attested letter from the Owner/Authorisation letter from the Authority.
  • Payment Receipt or Challan
  • Registration form signed by the owner

What is the fee for new registration?

No. of Employees

Fee (Rupees)

Nil Employee 300
One to Nine 600
Ten to Nineteen 4000
Twenty to Forty-nine 10000
Fifty to Ninety-nine 20000
Hundred to Two hundred and fifty 40000
Two hundred and Fifty-one to Five hundred 50000
Five hundred and one to One thousand 70000
Above a thousand 75000

 

Weekly Holiday for the Establishment

An establishment must remain closed for one day of the week. The owner of the establishment has to fix such a day at the beginning of the year and the same should be informed to the registration authority.

However, certain establishments are exempted from weekly holidays. Here are some of the establishments.

  1. Clubs, Hotels, School and College Hostels, Residential schools.
  2. Hair Cutting Saloon
  3. Copper, Container, Manufacturing Firms.
  4. Selling Petrol and Diesel
  5. Daily Newspaper & Weekly Magazines
  6. Cinema halls, theatres and other recreational centres.
  7. Medicine and Medical Equipment sellers
  8. Organisations performing research/study on infectious diseases.

Working hours:

Any Business or establishment within the prescribed working hours. In other words, any establishment shall not before and after the following hours.

  • Bangalore City –  Before 6 am and Night after 9 pm.
  • Other location: Before 8 am and after 8 pm.

Prohibition and Exemption:

Children under 14 years of age are prohibited to work in any establishment. No women shall be required or allowed to work in any establishment after 8 PM.

However, Information Technology/ Business Technology organisation can get permission to work after 8 PM (Form R).

Employment and Regulation:

  1. Any employee who has completed 180 days or 6 months of service cannot be dismissed without prior notice.
  2. Working time-period of any employee should not exceed 48 hours and 58 hours including extra working hours.
  3. Employee attendance should be maintained in Form T.
  4. Salary should be credited to every employee before the 7th of next month.

Forms & Records:

  1. Form A:
    Registration, Renewal and Report Change of information of establishment.
  2. Form P:
    Fixing different days for weekly holidays.
  3. Form F & Form H:
    Maintaining employee leave a record (Form F) and share a copy to the employee (Form H)
  4. Form T:
    Employee daily attendance.
  5. Form R:
    Permission to allow women to work after 8 PM.
  6. Form U:
    Annual Report for the year ending with 31
    st December shall be submitted before 31st January of next year.

The act will be implemented under the supervision of labour commissioner – Chief Inspector.

Inspector and Senior Inspector – Inspector and department level authorities are called as Additional Inspector. 

The government PDF of Shop and Establishment is available below. You can check this out.

Shop and Establishment – Karnataka

 


When can the taxpayer claim refund from electronic cash ledger?

If the taxpayer has paid excess amount by mistake, they can request for refund from the electronic cash ledger.Understand the procedure for GST registration and GST returns here.

How do banks assess the working capital requirements of borrowers?

Methods such as cash flow mismatch are used by banks to assess the capital requirements that the borrowers seek from banks.More on Income Tax Return Filing.

What does the Aadhaar number have to do with filing of tax returns?

Aadhar card is mandatory for tax payers in India. Non-resident Indians, people aged more than 80 years are exempt from providing Aadhar card when applying for PAN card. Learn more about Aadhar Certification.

What is the purpose of ISO standards?

ISO international standards checks whether the services and products remain reliable, good quality and safe. There are certain tools that helps in increasing productivity. More info on ISO Registration in india.

What is the benefit of ngo?

An NGO has a major role in resolving the issues of the underprivileged by using financial assistance received from the Government or foreign bodies.More about NGO Registration.

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Karnataka Shop and Establishment Act – A complete guide

11046
In July 2020, the Karnataka Government announced that they are thinking about the removal of surprise inspections under 12 Acts, including the Shops & Establishment Act of 1965. This is said to improve the ‘ease of doing business’ rankings for the State. 

 

The Karnataka Shops And Commercial Establishments Act, 1961 is one of the state labour laws enforced by the Department of Labour. This act is valid all over the state of Karnataka from the date notified by the state government. This act provides regulations and other guidelines for work and employment in Shops and Commercial establishments inside the state of Karnataka.

According to this act, the “Commercial Establishment” means

  1. Commercial
  2. Trading
  3. Banking
  4. Insurance Company
  5. An Establishment or Administrative services.

If you’re just looking around for related information on startups, government registrations, tax or legal documentation, check out the list of services we provide to make your interaction with government as smooth as is possible by doing all the legal documentation for you. We will also give you absolute clarity on the process to set realistic expectations.

A person where he/she is employed mainly in office work, a hotel, a restaurant, boarding, a café or other refreshment places

A theatre or any other public amusement or entertainment.

6. The State government can also declare a specific space as a commercial establishment for this Act. 

Shops mean any premises or location where the business or trade is carried on where service is provided to the consumers. It includes offices, storerooms, godowns, warehouses, etc. It can be on the same premises or otherwise. But, this explanation does not include a commercial or shop attached to the factory where the employee comes under the scope of the Factories Act, 1948.

Apply for Shop and Establishment License

What are all the business exempt from the shop & establishment Act?

As per the act, the “exemption” means the businesses which have nothing to do with this act.

  1. Offices of Central and State Government or local authorities.
  2. Postal, railway, Telephone, water transport services
  3. Offices of a banking Company
  4. Railway Dining Cars
  5. A place to treatment or care for the sick or people who is mentally unfit.
  6. Establishment of Food Corporation of India (FCI)
  7. Offices of a banking
  8. Offices of legal and medical operations where only three persons are employed
  9. A shop mainly in medicines, surgical requisites or appliances.
  10. A person directly engaged in a clerk job responsible for the despatch of goods.

What are the features of the Karnataka Shop and Commercial Establishment Act?

  • Issuing Registration Certificate
  • Renewal of Registration Certificate
  • Facilitating changes in Registration Certificate
  • Issuing Duplicate Registration Certificate
  • Annual Returns Filing
  • Exemption or relief weekly holidays
  • Exemption for Women working in Night Shifts
  • Appeal submission

Duties of the owner:

  • Registration of the organisation
  • Weekly Holiday for the Establishment
  • Fixing Working Hours
  • Employment and Regulation
  • Records Management

How to register an establishment under this act?

For registration and renewal of establishment under the Karnataka Shop and Commercial Establishment Act, 1961 entrepreneurs can avail the e-Karmika online facility.

  • In case of a new registration, you should register the organisation within 30 days from the date of commencement of business.
  • In case of an existing organisation, you should register the organisation from the date on which this Act comes into force.
  • The registration certificate is valid for five years and it should be renewed before the expiry date by paying fees and in the manner prescribed.
  • The business owner should display the registration certificate in a place where everyone can see inside the office premises.
  • If you plan to change any information, such change should be notified in the prescribed format to the registration authority.
  • After closing the business establishment, the owner should submit the registration certificate to the authority.

What are the documents to be uploaded?

  • Address proof on the owner (Aadhaar Card/ Voter ID/ Driving License)
  • Incorporation Certificate/MoA (In case of Private Limited Company)
  • Self-attested letter from the Owner/Authorisation letter from the Authority.
  • Payment Receipt or Challan
  • Registration form signed by the owner

What is the fee for new registration?

No. of Employees

Fee (Rupees)

Nil Employee 300
One to Nine 600
Ten to Nineteen 4000
Twenty to Forty-nine 10000
Fifty to Ninety-nine 20000
Hundred to Two hundred and fifty 40000
Two hundred and Fifty-one to Five hundred 50000
Five hundred and one to One thousand 70000
Above a thousand 75000

 

Weekly Holiday for the Establishment

An establishment must remain closed for one day of the week. The owner of the establishment has to fix such a day at the beginning of the year and the same should be informed to the registration authority.

However, certain establishments are exempted from weekly holidays. Here are some of the establishments.

  1. Clubs, Hotels, School and College Hostels, Residential schools.
  2. Hair Cutting Saloon
  3. Copper, Container, Manufacturing Firms.
  4. Selling Petrol and Diesel
  5. Daily Newspaper & Weekly Magazines
  6. Cinema halls, theatres and other recreational centres.
  7. Medicine and Medical Equipment sellers
  8. Organisations performing research/study on infectious diseases.

Working hours:

Any Business or establishment within the prescribed working hours. In other words, any establishment shall not before and after the following hours.

  • Bangalore City –  Before 6 am and Night after 9 pm.
  • Other location: Before 8 am and after 8 pm.

Prohibition and Exemption:

Children under 14 years of age are prohibited to work in any establishment. No women shall be required or allowed to work in any establishment after 8 PM.

However, Information Technology/ Business Technology organisation can get permission to work after 8 PM (Form R).

Employment and Regulation:

  1. Any employee who has completed 180 days or 6 months of service cannot be dismissed without prior notice.
  2. Working time-period of any employee should not exceed 48 hours and 58 hours including extra working hours.
  3. Employee attendance should be maintained in Form T.
  4. Salary should be credited to every employee before the 7th of next month.

Forms & Records:

  1. Form A:
    Registration, Renewal and Report Change of information of establishment.
  2. Form P:
    Fixing different days for weekly holidays.
  3. Form F & Form H:
    Maintaining employee leave a record (Form F) and share a copy to the employee (Form H)
  4. Form T:
    Employee daily attendance.
  5. Form R:
    Permission to allow women to work after 8 PM.
  6. Form U:
    Annual Report for the year ending with 31
    st December shall be submitted before 31st January of next year.

The act will be implemented under the supervision of labour commissioner – Chief Inspector.

Inspector and Senior Inspector – Inspector and department level authorities are called as Additional Inspector. 

The government PDF of Shop and Establishment is available below. You can check this out.

Shop and Establishment – Karnataka

 


When can the taxpayer claim refund from electronic cash ledger?

If the taxpayer has paid excess amount by mistake, they can request for refund from the electronic cash ledger.Understand the procedure for GST registration and GST returns here.

How do banks assess the working capital requirements of borrowers?

Methods such as cash flow mismatch are used by banks to assess the capital requirements that the borrowers seek from banks.More on Income Tax Return Filing.

What does the Aadhaar number have to do with filing of tax returns?

Aadhar card is mandatory for tax payers in India. Non-resident Indians, people aged more than 80 years are exempt from providing Aadhar card when applying for PAN card. Learn more about Aadhar Certification.

What is the purpose of ISO standards?

ISO international standards checks whether the services and products remain reliable, good quality and safe. There are certain tools that helps in increasing productivity. More info on ISO Registration in india.

What is the benefit of ngo?

An NGO has a major role in resolving the issues of the underprivileged by using financial assistance received from the Government or foreign bodies.More about NGO Registration.

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