Friday, August 17, 2012

Trade Licence - Issue, Renewal and Cancellation

Trade license is a permit issued by a Municipal Corporation (Nagar Palika) to any trader, whosoever is willing to do business within the jurisdiction of that authority. The licence can be taken for every type of commodity that falls under the list of licensed products. The trade licence is issued for a set period of time, and has to be renewed after its expiry date.

Issue of Trade License

A trade licence can be obtained from the licensing authority of a local Municipal Corporation or Nagar Palika. According to the procedure of issuance, the proprietor has to file an application with the prescribed form, under Section 199. A set fee is also charged along with the filing of application, and the fee structure is decided by the Municipal Corporation itself. On applying for a trade license, certain documents like tax bill, rent bill or lease agreement are required to be submitted along with the application. Basically, the documents required depend on the nature of the business for which the trade licence is applied for.

In the case of companies applying for trade licences, they will have to submit their Memorandum of Association, and a separate Declaration in Form No. 32. A Special Enquiry may be carried out for the trade licences of items that fall under the Red Category. In fact, the licensing authority may also undertake a Special Enquiry for the issuance of duplicate trade licences.

Renewal of Trade Licence

A Trade License is issued for a particular period of time, as per the decision of the Municipal Corporation’s licensing authority. A notice is always sent to the trader, prior to the expiry of the license renewal date. In case delay in renewal is caused, traders will have to pay fine charges, along with the renewal fee. The application of renewal of new license is dealt with, in accordance with the policy framed by the Municipal Corporation (Nagarpalika) or the Government of India.

Cancellation of Trade Licence

Trade Licenses can be cancelled for carrying out illegal business. In the case of export business, a trade licence may be cancelled if the business owner is found to be a defaulter. Being a defaulter means that the businessman is not carrying out his business activities based on the terms referred to, while issuing the trade license. The licensing authority sends a notice to the concerned businessman, before finally cancelling the trade licence. The procedure leading to suspension and cancellation of trade licences is governed by Section 9 of the Act, read with Rule 9 (suspension) and Rule10 (cancellation) of the Rules.

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