When you set up a Kirana shop, there are several aspects that need to be taken care of.
You need to decide on the legal business structure of your Kirana store. Some of the options are Sole Proprietorship, Partnership, Limited Liability Partnership, and a Company Limited by shares. Once your business is registered as a legal entity, you can start with the remaining requirements to set up a Kirana store.
Place of Business
You need to find a premise from where your Kirana store will conduct its business. Once you have located a suitable location, you need to enter into a rental agreement with the landlord. Ensure that a NOC for running a Kirana store from the said premises is included in the agreement.
It is mandatory to get a Trade License for a Kirana store from your local municipality within 30 days of commencing business. The Trade license lays out the rules and regulations that your business must follow in terms of working hours, employment practices, etc. It is a straightforward process and requires submission of your basic documents such as business registration, PAN card, etc. This license must be renewed every year before March 31st.
Registration Under The Shops and Establishment Act, 1953
The first thing you are required to do as the owner of a Kirana Shop is to register your shop under ‘The Shops and Establishment Act, 1953’.
- Any premises that are used for and from where goods and services are sold, either in wholesale or retail is defined as a Shop under this act. By extension, a Kirana store comes under this act.
- As the owner of a Kirana store, you are required to submit your application along with the requisite legal fees to the local inspector within the stipulated time period.
- The legal fees and stipulated time periods for application submission vary from state to state.
- Your name as the owner, the address of the shop, the approximate number of employees and other applicable details need to be filled out to complete the application. The certificate of registration will be issued by the Chief Commissioner once they are satisfied with the details submitted in the application.
- As the owner of a Kirana store, you are legally bound to display your registration certificate prominently. You are also required to update the registration periodically.
- If you need to make amendments to the registration, you can do so by notifying the local inspector within 15 days of the changes.
- The relation between the shop owner and the inspector is ongoing from issuing the registration certificate when the shop is opened to informing the inspector that the shop has been closed so that they can cancel the registration.
- For ease of business, the Government of India has introduced facilities for online registration under the Shops and Registration Act. Kirana store owners across many municipalities across the country can avail of online registration through the municipality’s website.
As your Kirana store deals with edible items, it falls under the jurisdiction of the Food Safety and Standard Authority of India (FSSAI). As a Food Business Operator (FBO) it is very important to understand the likely turnover of your business as this is the single most important factor to determine the category of license you need to apply for.
In case your turnover is less than Rs 12 lakhs, you are not required to obtain a license and can register yourself by filling Form A under Schedule II of FSSAI.
As a Kirana store business, you are required to pay tax and register under GST. You can find out how to get gst number from the official GST website portal. Once registered, your business will be assigned a 15 digit GSTIN unique to your business. Keep this on hand as you will need it for all GST related matters including GST filing. To make GST compliance easier, you should use a gst invoice.
Setting up a Kirana store in India is a fairly straightforward process. If necessary, get professional help to ensure you meet all legal regulations for your Kirana store.