The Karnataka Shops and Establishment Act regulates the operations of shops and commercial establishments. The Karnataka Shops and Establishment 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 establishment.
The Karnataka Shops and Commercial Establishment 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 even if 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 Establishment 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 declared to be a commercial establishment for the purposes of this Act.”
The following are some of the major aspects of the Karnataka Shops and Establishment 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. Also, young person and woman cannot be required or allowed to work whether as an employee or otherwise in any establishment during night. A young person is anyone who has completed the age of fourteen, but not eighteen.
Hours of Work - As per the Karnataka Shops and Establishment 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 wages need to be provided for overtime. Further, the period of work of an employee in an establishment should be fixed so that, no period or work exceeds five hours without an interval.
Weekly Holiday - All establishments in Karnataka are required to remain close 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 sufficient additional staff, then 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. In case, of young persons, the employee should be allowed to avail a leave with wages at the rate of one day for every fifteen days of work performed.
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
Profession Tax (PT) is a tax levied on the employment and Profession by respective State Government in India. Since the Profession Tax falls under the ambit of the State Governments as per the Article 276 of the constitution, it varies from state to state. There are many states in India which do not even levy the Profession Tax. However, article 276 also caps the upper limit of the profession tax to Rs. 2500.
In Karnataka, Profession Tax is levied under the Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976. Under the provision 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.
No Professional tax is payable by persons who have attained age of 65 years and 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, callings or employment in the State of Karnataka:
• Employees with 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.
Every branch of a firm, company, corporation or other corporate body, any society, club or association is treated as separate person for the purpose of tax liability.
Who is liable to pay the 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 before making the payment of salary to employee and such employer shall be liable to pay tax to the Government on behalf of all such employees.
Registrations under 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
Employer registration is meant for all businesses and organisation. This registration is regardless of the employees working in the organisation. The Certificate of Enrolment, as issued by the Profession Tax Office, is the certificate of registration. This certificate includes the details of the tax payable by the employer and payment date. Failure to remit the professional tax within the due date may lead to a penalty.
Professional Tax Employee Registration
Professional tax for the employee is deducted by the employer. The Certificate of Registration is obtained by the employers. Every employer liable to Professional Tax on behalf of their employees must obtain Employee Registration - Certificate of Registration (RC) with in thirty days of his becoming liable to pay tax (starting employment of people).
Professional Tax Employee Registration is a must for all the employers who employ people with salary or wages of Rs.15000 /- or more. Certificate of Enrolment (EC) is must for obtaining the Certificate of Registration (RC).
Compliance under the Professional Tax Regulations
The employers must remit taxes as per the professional tax slab on behalf of the employees. For employees with gross monthly salary Rs. 15,000 or above, the professional tax is Rs. 200 per month. This must be paid by the employers on behalf of them. The filing of returns must be done within twenty days from the month for which the tax is 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.
All employers and businesses with Enrolment Certificate must remit their taxes before the 30th of April every year as per the stipulated tax slab. Moreover, employers with the Enrolment Certificate are required to file annual returns within 60 days of the end of the fiscal year.
The returns must incorporate all the details of the salaries remitted to the 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. Basically, EPF is normally like a benefit to an employee during the retirement provided by the organization.
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
Establishment employing 20 or more employees during any time in the previous year
Central Government, after giving two months’ notice to the certain establishment for compulsory registration irrespective of their employees. Such an establishment shall get themselves registered immediately upon the 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 that may arise due to retirement, an illness or their demise
Uniform account: One of the most important aspects of the Provident Fund account that it's steady and transferable. It can be carried forward to any other place of employment. The PF account can be transferred while switching jobs. Universal Account Number (UAN) linked to the Aadhar will start to facilitate the linking of the previous accounts. It can be carried forward to the new employer instead of being closed down. This uniformity ensures that the rate of return is compounded over the years
Employee Deposit Linked Insurance Scheme: This scheme is for all the PF account holders. According to it, 0.5% of the 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 higher education that require the urgent availability of funds. The accumulated PF amount often comes handy during such occasions
Emergency needs: There are certain unanticipated occasions like marriage or other family occasions, any mishappening or illness that require urgent finance. The PF amount can be of great 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 Employee Pension Scheme (EPS)
Once the establishment is registered with EPFO, it shall comply with certain mandatory provisions monthly/annually as prescribed under the Act:
Monthly return is filed online through the establishment login by uploading the ECR sheet
Return is filed online with the 15th of succeeding month
ECR sheet can be downloaded through EPFO in the XML sheet that contains name & UAN of every employee registered with the establishment during the month for which 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 assistance, ESI scheme extends medical care to the employees insured under the ESI Act and their families.
ESI stands for Employee State Insurance managed by the Employee State Insurance Corporation which is an autonomous body created by the law under the Ministry of Labour and Employment, Government of India. It is a self -financing scheme and is funded by the contributions made by the employer as well as employees to the ESIC.
Benefits of ESI Registration
Sickness benefits are provided to the employee at the rate of 70% of his salary in case such sickness continued for exceeding 91 days in a year, and the same is also certified
Medical benefits are provided to the insured person along with his family members
Maternity Benefits are provided to the women in the form of paid leaves
90% of the salary of the insured person is given to the family of a deceased employee, in case such death occurred while in employment
In case there is any permanent disablement to 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.
An insured person having insurance for more than three years is provided unemployment benefits which become unemployed. Such 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:
2. Restaurants or Hotels only engaged in sales
4. Establishments engaged in Road Motor Transportation
5. Newspaper establishments (which is not covered under the factory act)
6. Private Educational Institutions
Applicability of ESI and Its Coverage
Above mentioned entities, if employed ten or more employees at any time during the previous year shall mandatory take ESIC Registration. But insurance is deducted for only those employees earning monthly income up to INR 21000 (Basic wages + Dearness Allowance). In a few states, the coverage of ESIC applicability limited to a minimum employee is 20 or more.
ESI scheme provides several benefits to employees covered under ESI with a large network of dispensaries, hospital and medical clinics for providing quick medical care to the insured person. An entity needs to take 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.
Once the entity is covered under ESIC, it needs to comply with mandatory guidelines as issued by the Act:
Maintenance of attendance register
A complete register of wages for workers
Monthly return & challan within 15th of succeeding month
The register maintained to record any accidents that happened on the premises.
The Food Safety and Standards Authority of India (FSSAI) was formed under Food Safety and Standards, 2006 with two major objectives viz.
To consolidate different acts & laws that is associated with the orderly management of food-related issues under various Departments and Ministries.
To lay down a science-based benchmark for the food production, storage, distribution, import and sale to ensure that the food is safe and healthy for human consumption or other uses connected with it or similar thereto.
Food Safety and Standard Authority of India became a single reference body for setting up the standard and rules & regulations & directly reporting to the family & health 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 the 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 the food license in the earliest time possible and with proper documentation.
ISO REGISTRATION & CERTIFICATION
ISO is an International Organization for Standardization that develops & publishes an international standard. ISO consists of representatives from different national standards bodies and aims at improvement in information security and protection of company assets. ISO certification improves the credibility of the business and helps to get more business.
ISO Registration Benefits
An ISO registration opens up the avenues for you to enter in the global business market.
Increased Efficiency & Productivity
The productivity of the company is streamlined through ISO Registration, followed by optimistic expansion of resource acquisition and international growth.
Security and Satisfaction of Consumers
ISO Registration offers credibility, safety and commitment to consumers and also knocks off the products that lay adverse effects on the environment.
We at Arpitha & Associates can help you to get the ISO Registration and Certification in the earliest time possible and with proper documentation
STPI & Non STPI Registration
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