Shop & Establishment Act Reg. Is Mandatory For ESI & EPF Registration.

We have 18 employees, and we are recruiting more manpower in the coming months. We have decided to provide ESI & EPF for all the employees. Currently, we have service tax registration, but we do not have a shop & establishment license. We wanted to know if it is mandatory to have a Shop & Establishment license to submit an application for ESI & EPF.

Yes, it is mandatory whether you are registered under The Factories Act 1948 (if the strength is more than 10 and power is being used) or The Shops & Establishment Act (if the strength is less than 20 and power is not used in manufacturing activity).

To get EPF/ESI benefits, it is mandatory that you have to be registered under one of the following:
(a) Having a license under The Contract Labour (Regulation and Abolition) Act 1970.
(b) License under The Shops & Establishment Act.
(c) License under The Factories Act 1948.

Hi Vishy,

It is compulsory to get registered under either a Factory License or a Shop Act License before you can apply for PF/ESIC registration. It is mandatory for all. The factory license depends upon the nature of your establishment, whether it falls under the definition of a factory. Also, check if your office falls within a Municipal area or a Gram Panchayat area. If it is within a Gram Panchayat area, then there is no need to take a Shop Act license; you just need to obtain a NOC from the Gram Panchayat.

Thank you, Mr. Ashok. Now, we will first proceed with the Shop establishment and then submit an application to become a member of ESI & EPF. Thank you again.

You may also need to register for Professional Tax, PAN, TIN/TAN if any manufacturing and service, sale of goods business is involved. Take care of registration for Central Excise, service tax, VAT as well.

Kumar.s.

Dear All,

If your establishment comes under the following, then go for the registration under the Shops and Establishment Act. "Establishment" means a shop, a commercial establishment, residential hotel, restaurant, eating house, theatre, or other places of public amusement or entertainment to which this Act applies and includes such other establishments as the Government may, by notification in the Official Gazette, declare to be an establishment for the purposes of this Act.

Alternatively, if it comes under the following, then go for the registration under the Factory Act: (m) "factory" means any premises including the precincts thereof - (i) where ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on, or (ii) where twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on - but does not include a mine subject to the operation of the Mines Act, 1952 (35 of 1952), or a mobile unit belonging to the armed forces of the Union, a railway running shed, or a hotel, restaurant, or eating place.

Explanation: For computing the number of workers for the purposes of this clause, all the workers in different groups and relays in a day shall be taken into account. Explanation II: For the purposes of this clause, the mere fact that an Electronic Data Processing Unit or a Computer Unit is installed in any premises or part thereof shall not be construed to make it a factory if no manufacturing process is being carried on in such premises or part thereof.

However, you are not required to be registered under both the Factory Act and the Shops & Establishment Act. You have to be registered under either of the one. Be clear on this point. After registration is done, you can apply for the ESI or EPF registration.

Thanks to all,

Raj Labour Law consultant

Hi Ratikanta Rath,

As you mentioned, "if an office comes under Gram Panchayat area, then there is no need to take the Shop Act; you just need to obtain an NOC from the Gram Panchayat."

I need a bit of guidance from you on this: if an office receives the NOC from the Gram Panchayat, would the registration of the office be unnecessary under any act? Additionally, could you provide guidance on which act mandates the maintenance of statutory records in this scenario?

An early response would be greatly appreciated.

Thanks and Regards,
Ratikanta Rath

Can someone tell me how we can check if a company has a Shop and Establishment Certificate?

If any branch comes under the gram panchayat, is it required to obtain a shop & establishment license or is an NOC enough? Please let me know urgently.

Dear,

We have a project in Pune, and we are a secondary stakeholder of the project. We represent a subcontractor for the project and need to deploy the manpower for the work to be performed as per the requirements of the primary stakeholder.

So please clarify, do we need registration under the Bombay Shop & Establishment Act. My registered office is in Delhi, and I do not have any office in Pune.

Regards,
Rushpal Singh
8588860899

Dear All,

It was a very good piece of information. I have a query here since they will get NOC from Gram Panchayat, aren't they still covered under Shop and Establishment or Factories Act, i.e. for example, if I have NOC from the Gram Panchayat to run a Warehouse. According to the definition of Shop, I will be covered under Shop and Establishment Act. Now, since we get NOC from the Gram Panchayat, I will not register myself under Shop and Establishment yet all the provisions like management of Register, working hours of my establishment will be governed under Shop and Establishment Act, right? If not, under what rule or any Act are they covered.

Please provide your valuable information on this.

Thank You

Regards,
Smita

Dear Smita ji,

Gram Panchayat NOC will not exempt you from the obligation of registration under the S & E Act. You are required to register yourself under the S & E Act of the state in which you conduct your business. Gram Panchayat NOC is applicable in cases where registration under the municipal rules of a city or state is to be avoided. For example, a restaurant operating as a company on Gram Panchayat land may be exempt from obtaining a municipal health license, subject to certain conditions. The applicability is based on the area of jurisdiction. Compliance with any relevant Act must be ensured within its jurisdiction for implementation and adherence.

Thanks,

Adv. Raj Singh Phogat
Delhi Bar Association
www.labourlawsonline.com
Home - labourconsultant.com

Hi Vishy,

You have mentioned that if the location falls under Gram Panchayat, there is no need to obtain a Shop Act license. We have another unit for which we have obtained a No Objection Certificate (NOC) from the Gram Panchayat, but it is not registered under the Shop Act. Can the NOC from the Gram Panchayat suffice in this scenario? Is it considered equivalent to a Shop and Establishment Act certificate?

Please reply.

Thanks!
Saunee

Obtaining a labor license is mandatory in all states. In Andhra Pradesh, one can obtain the labor registration certificate under the A.P. Shops and Establishments Act, along with five other acts, integrated labor license through Mee Seva directly without having to wander to the local labor license office.

Yes, you have to obtain a labor license under the Contract Labor Act of 1970 from the Maharashtra Labor Department near your workplace. If your work is for the central government, then you have to obtain a license from the Central Assistant Labor Commissioner. If not, obtain a labor license from the Maharashtra State Labor Department and another labor license under the Shops and Establishments Act in New Delhi, applicable to your head office registration for the supply of manpower throughout the country.

Respected seniors,

In this thread, I have studied that registration under the S & E Act or Factory Act is mandatory to get registration in EPF & ESI. However, as per my knowledge, we can also use the service tax or sales tax registration to obtain registration in EPF & ESI. Hence, there is no need to obtain a license under the S & E Act and Factory Act.

Please correct me if I am wrong?

In continuation with Smita's response, two possible queries come to mind, which are as follows:

1) If we obtain Gram Panchayat NOC from the respective authority, would I need to follow the S&E checklist, or would there be a different checklist available under Gram Panchayat?

2) And if at all I don't obtain NOC from Gram Panchayat, what are all the consequences and challenges under the state constitutions? As many of you are aware, the respective authorities wouldn't issue NOC certificates even after continuous follow-ups. I would be glad to get legal guidance under the above circumstances.

Also, please share some sort of experience that you have come across in the past.

Regards,
Janardan

Can someone tell me if any contractor supplying labor in a factory and he has less than 20 workmen, then does the contractor need to take a license under the Shop & Establishment Act or not?