Is Trade License Required For GST Registration

Is Trade License Required  For GST Registration

What documents will you need to start a new business? Do you need a trade license to register for GST? Find out. 

What Does Trade License Mean?

A trade license is a permit or certificate that authorizes an individual or company to do business. This license is usually issued by the state or the city government for a specific part of the city. The license will allow the applicant to operate in a specific territory. Conditions of the license must be followed.

Based on how much risk a business poses, licenses are categorized into the following categories:

Level Of Low Risk

Any business without a high risk can get a license of this type. Restaurants and other types of eateries usually obtain a license for this purpose.

Level Of Medium-Risk

Typically, a small or medium-sized business obtains this type of license.

Level Of High Risk

Typically, such permits are issued to large businesses and industries. When dealing with hazardous materials, such businesses are exposed to significant risks. These premises usually have more monitoring restrictions than low- and medium-risk licenses.

Who Is Incharge For Issuing Trade Licenses?

These licenses can only be issued by government or municipal agencies. In Bangalore, applications for opening restaurants must be approved by the Bruhat Bangalore Mahanagara Palike (BBMP). The BBMP website contains the application forms.

What Is The Need For A Trade License?

  • Keeping track of a company’s activities. Through this license, local governments can determine whether a business is breaking any laws or causing a societal nuisance.
  • It indicates compliance with government regulations when such a license is issued.
  • Permits for this type of operation require the use of environmentally friendly substances within a given area. In the case of residential and municipal bonds, hazardous and other chemical compounds are prohibited.
  • Licenses of this type would require businesses to take the necessary measures when performing a specific task. Businesses that hold this license must also follow the requirements set forth by the local or state government consistently.
  • Municipalities and local governments must avoid anti-competitive practices. Businesses cannot operate in residential areas.

Is A GST Registration Mandatory If You Hold A Trade License?

No, in a nutshell. A trade license is not required for GST registration; however, it is required for businesses operating within a particular municipal jurisdiction. Moreover, just because GST registration does not require a trade license does not preclude obtaining a trade license.

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