Why Trade License?
To safeguard the public at large against the health hazard and nuisance which a trader / business may cause. Trade license is a method to regulate the trade and to ensure compliance with rule and safety guidelines issued by government.
Licensing Authority for Trade License
Trade License(s) are issued by the authorised department of a municipal corporation in consultation with other specialised departments like fire brigade, health, engineering department having jurisdiction over the business.
Trade License can be availed only if the business is run in the Permitted area. I.e. a Commercial, Local commercial, Notified Commercial, Mixed Land Use or Residential area with small shops of maximum 20 sq.m. on ground floor only.
Who Need Trade License?
Every trader engaged in a general trading activity within the territorial limits of any municipal corporation is required to obtain a trade license. The class of trade license differs from state to state and is based on the nature of the business.
Objective of Trade License
The objective of Trade License is control business locations by way of putting constraints on people from running certain types of businesses from their home to maintains the separate business environment and preserves locality environment.
State Wise Application of TL
While some state has made it mandatory to obtain a trade license, but in some states it is optional. The kind of license and license fee also differs from state to state. Some states charge a monthly fee while others charge a % of the turnover.