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The Karnataka Shops and Establishments Act regulates the operations of shops and commercial establishments. The Karnataka Shops and Establishments Act was introduced to regulate the hours of work, annual leave with wages, wages and compensation, employment of women and children and other aspects of shops or commercial establishments. 

The Karnataka Shops and Commercial Establishments Act extends to the whole State of Karnataka. Registration is mandatory for all shops and commercial establishments including offices, storerooms, godowns or warehouses located in Karnataka, except those exempted. This Act is applicable regardless of whether you have one employee or none.

The Karnataka Shop and Establishment Act defines a shop as:

“A “shop” means any premises where any trade or business is carried on or where services are rendered to customers, and includes offices, storerooms, godowns, or warehouses, whether in the same premises or otherwise, used in connection with such trade or business, but does not include a commercial establishment or a shop attached to a factory where the persons employed in the shop fall within the scope of the Factories Act, 1948.”

The Karnataka Shops and Establishments Act defines a commercial establishment as:

“The “commercial establishment” means a commercial or trading or banking or insurance establishment, an establishment or administrative service in which persons employed are mainly engaged in office work, a hotel, restaurant, boarding or eating house, a cafe or any other refreshment house, a theater or any other place of public amusement or entertainment and includes such establishments as the State Government may by notification declare to be a commercial establishment for the purposes of this Act.”

The following are some major aspects of the Karnataka Shops and Establishments Act:

Employment of Child, Young Persons and Women - The Karnataka Shops and Establishment Act prohibits the employment of a child at any establishment. A child is any person who has not completed fourteen years of age. In addition, young women and men cannot be forced or allowed to work during the night, whether as employees or otherwise. A young person is anyone who has completed the age of fourteen, but not eighteen.

Hours of Work - As per the Karnataka Shops and Establishments Act, employees can only work for nine hours on any day and forty-eight hours in any week. If the employee works more hours, then compensation needs to be provided for overtime. Further, the period of work of an employee in an establishment should be fixed so that no period of work exceeds five hours without an interval.

Weekly Holiday - All establishments in Karnataka are required to remain closed for one day of the week and every employee in an establishment must be given at least one whole day in a week as a holiday for rest. However, if the establishment has additional staff, it can remain open throughout the week.

Annual Leave with Wages - Employees working in an establishment in Karnataka have a permit to avail a leave with wages at the rate of one day for every twenty days of work done young employees should be granted a leave with pay at the rate of one day for every fifteen days they have worked.

We at Arpitha & Associates can assist you to get the Shops & Establishment License in the earliest time possible and with proper documentation.

PROFESSIONAL TAX REGISTRATION IN KARNATAKA

In India, the state government levies a tax on employment and profession (Profession Tax (PT)). Since the Profession Tax falls under the ambit of the State Governments as per Article 276 of the constitution, it varies from state to state. There are many states in India that do not even levy a profession tax. However, article 276 also caps the upper limit of the profession tax at Rs. 2500. 

In Karnataka, Profession Tax is levied under the Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976. Under the provisions of the Act, Profession Tax shall be paid by every person exercising any profession or calling or is engaged in any trade or holds any appointment, public or private as specified in the Schedule to the Act.

People over 65 are not subject to professional tax. No tax is payable for holding any profession for less than 120 days in that year.

Professional Tax is payable by the following ‘PERSONS’ (Individuals and Business Entities) engaged in any profession, trade, calling or employment in the State of Karnataka:

A. Employees

• Employees with a Salary/Wage of Rs.15000 /- or more

B. Employers (Business Organisations)

• Sole proprietor.

• Partnership Firm (Registered / Unregistered)

• Limited Company (Private / Public)

• Limited Liability Partnership

• Corporations and Corporate Bodies

• Hindu Undivided Family (HUF)

• Trust / Society / Club / Association.

Each branch of a firm, company, corporation or other corporate body, any society, club or association is treated as a separate entity for the purposes of taxation.

Who is liable to pay Professional Tax in Karnataka?

Tax payable under this Act by the employee shall be deducted by his employer from the salary or wage of the employee. This deduction shall be made prior to the payment of salary to the employee. Such employer shall be liable to pay tax to the Government on behalf of all such employees.

Registration under the Professional Tax Act

Under the Professional Tax Regulations in Karnataka, an employer must obtain two registrations depending on the status whether there are people employed by the business or not.

Professional Tax Employer Registration

Organizations and businesses must register as employers regardless of how many employees they have. The Certificate of Enrolment, issued by the Profession Tax Office, is the certificate of registration. This certificate includes details of the tax payable by the employer and the payment date. There may be a penalty if professional tax is not remitted by the due date. 

Professional Tax Employee Registration

Employers deduct professional taxes from employees' salaries. Employers obtain a Certificate of Registration. Employers who are liable for Professional Tax on behalf of their employees must obtain an Employee Registration - Certificate of Registration (RC) within thirty days of becoming liable for tax (starting employment).

Employers who pay salary or wages of Rs.15000 /- or more must register their Professional Tax Employees.e. Certificate of Enrolment (EC) is must for obtaining the Certificate of Registration (RC).

Compliance with the Professional Tax Regulations

Monthly returns

Employers must remit taxes as per the professional tax slab on behalf of employees. Employees with a gross monthly salary of Rs. 15,000 or above, the professional tax is Rs. 200 per month. This must be paid by employers on behalf of them. The filing of returns must be done within twenty days of the month for which tax was deducted from the employee’s monthly salary during the previous month. Failure to do so may lead to a penalty of Rs. 250 for every month.

Annual returns

All employers and businesses with an Enrolment Certificate must remit their taxes before the 30th of April every year as per the stipulated tax slab. Moreover, employers with an Enrolment Certificate are required to file annual returns within 60 days of the end of the fiscal year.

The returns must include all the details of the salaries remitted to each of their employees and the professional tax deducted.

EMPLOYEES PROVIDENT FUND REGISTRATION & COMPLIANCE

Employees Provident Fund [EPF] is a scheme under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. It is regulated under the purview of Employees’ Provident Fund Organisation (EPFO) which is the largest social security organization with a large volume of financial transactions taking place. EPFs are normally provided as a retirement benefit to employees by their employers.

APPLICABILITY OF EPF REGISTRATION FOR EMPLOYERS

EPF registration is mandatory for all establishments which is a -

Factory engaged in any industry having 20 or more employees during any time of the year

Establishments employing 20 or more employees at any time in the previous year

Government, giving two months' notice to the establishment for compulsory registration, regardless of employees. Such an establishment shall be registered immediately upon receipt of the notice

BENEFITS OF EPF REGISTARTION 

Risk coverage: The most fundamental benefit of the Provident Fund is to cover the risks employees and their dependents may face due to retirement, illness or their demise

Uniform account: One of the most significant aspects of the Provident Fund account is that it is stable and transferable. It can be carried forward to any other place of employment. The PF account can be transferred when switching jobs. In order to facilitate the linking of previous accounts, the Universal Account Number (UAN) will be linked to Aadhar. It can be carried forward to a new employer instead of being closed down. This uniformity ensures that the rate of return is compounded over the years

The Employee Deposit Linked Insurance Scheme is for all employees with a PF account. According to it, 0.5% of salary is deducted from the life insurance premium

Long-term goals: There are many long-term goals such as buying a property or setting up a fund for children's higher education that require the urgent availability of funds. The accumulated PF amount often comes in handy on such occasions 

Certain unanticipated events, such as weddings or other family functions, mishaps or illness, necessitate urgent funds. The PF amount can be of substantial help during mishaps, illnesses, weddings and educational expenses

Covers pension: Apart from the employee’s 12% contribution towards EPF, an equal amount is contributed by the employer, which includes 8.33% towards the Employee Pension Scheme (EPS).

MANDATORY COMPLIANCE

Once the establishment is registered with EPFO, it shall comply with certain mandatory provisions monthly/annually as prescribed under the Act:

Monthly returns are filed online through the establishment login by uploading the ECR sheet

Returns are filed online by the 15th of the succeeding month

ECR sheet can be downloaded through EPFO in the XMsheet. This sheet contains the name & UAN of every employee registered with the establishment during the month for which the return is filed

XML sheet shall be converted into a Comma-dilemma file for uploading the same for return filing

Complete the return filing by contributing online payment gateways.

EMPLOYEES STATE INSURANCE REGISTRATION & COMPLIANCE

Employees’ State Insurance (ESI) scheme of India is a multidimensional social security scheme that is basically designed to provide socio-economic protection to employees working in the organized sector against the events of sickness, maternity, death or disablement on account of an employment injury. In addition to financial support, the ESI scheme provides medical care for employees insured under the ESI Act and their families.

ESI stands for Employee State Insurance managed by the Employee State Insurance Corporation. This is an autonomous body created by law under the Ministry of Labour and Employment, Government of India. It is a self-financing scheme and is funded by contributions made by employers as well as employees to ESIC.

Benefits of ESI Registration

If an employee becomes ill for more than 91 days in a year, he will be entitled to sick pay at the rate of 70% of his salary. The same is also certified 

Medical benefits are provided to the insured person along with his family members

Maternity benefits are provided to women in the form of paid leaves

90% of the insured's salary is paid to the family of a deceased employee, in case such death occurred while in employment

In case of permanent disability of the insured person, 90% of his salary is provided as a monthly payment in the form of insurance benefit

Funeral expenses are provided in case of death of any employee covered under ESIC

Medical care and benefits are provided after retirement or in old age.

When an insured person loses their job after having insurance for more than three years, they are entitled to unemployment benefits. These allowances are provided at the rate of 50% of the salary for one year

Eligible Entities for ESI Registration

As per the government notification dated Sec 1(5) of the ESI Act the following entities are covered:

1. Shops

2. Restaurants or hotels that only offer sales

3. Cinemas

4. Establishments engaged in road and motor transportation

5. Newspaper establishments (which are not covered under the factory act)

6. Private educational institutions

Applicability of ESI and Its Coverage

The above-mentioned entities, if employed ten or more employees at any time during the previous year, are required to register with ESIC. But insurance is deducted from those employees earning monthly income up to INR 21000 (Basic wages + Dearness Allowance). In a few states, the coverage of ESIC is limited to employers with 20 or more employees.

Employees covered by the ESI scheme enjoy several benefits, including a large network of dispensaries, hospitals and clinics for quick access to medical care. An entity must obtain an ESI registration certificate within 15 days of becoming applicable. However, ESIC regulations are different for different states, and thus, certain rules and provisions vary accordingly.

Mandatory compliances

Once the entity is covered under ESIC, it needs to comply with mandatory guidelines as issued by the Act:

Maintenance of an attendance register

A complete register of wages for workers

Inspection book

Monthly return & challan due by 15th of succeeding month

A register is kept to record any accidents that happen on the premises.

FASSI REGISTRATION

The Food Safety and Standards Authority of India (FSSAI) was formed under Food Safety and Standards, 2006 with two major objectives viz.

Consolidating various laws and acts that relate to the orderly management of food-related issues under various Departments and Ministries.

Lay down science-based benchmarks for the production, storage, distribution, import and sale of food to ensure that the food is safe and healthy for human consumption and other uses associated with it or similar thereto.

Food Safety and Standard Authority of India became a single reference body for setting up standards and rules & regulations & directly reporting to the Ministry of Health & Family Welfare, Government of India (GOI).

With these primary objectives, the FSSAI consolidated all the food-related acts under the Food Safety and Standard Authority of India and made it compulsory for all food-related businesses to comply with the guidelines & regulations laid under the Food Safety and Standard Authority of India Act 200 and get themselves registered under FSSAI.

We at Arpitha & Associates can help you to get a food license at the earliest time possible and with proper documentation.

ISO REGISTRATION & CERTIFICATION

ISO is an International Organization for Standardization that develops & publishes international standards. ISO consists of representatives from different national standards bodies and aims at improving information security and the protection of company assets. ISO certification improves the credibility of the business and helps to increase business.

ISO Registration Benefits

Global Business

By registering with ISO, you are able to enter the global business market.

Increased efficiency & productivity

With ISO registration, the productivity of the company is streamlined, followed by resource acquisition and international expansion.

Security and Satisfaction of Consumers

ISO Registration offers credibility, safety and commitment to consumers and also knockoff products with adverse effects on the environment.

We at Arpitha & Associates can help you to get ISO Registration and Certification in the earliest time possible and with proper documentation

STPI & Non STPI Registration

Digital Signature