1. Documents required for trading
in domestic market
SESSION 10
LEGAL ENVIRONMENT OF BUSINESS
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2.  Retail is one of India's fastest-growing economic
sectors because the working population is increasing
and the buying power of the people is also
increasing. Starting a retail business requires certain
documentation that needs to be in place in order to
adhere to the national and local law.
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3. Documents/laws/acts related to
trading in domestic market
Register the company’s name
Tax account no. (TAX)
PAN
Registration Act
Indian stamp act
Easement act 1882
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4. Documents/laws/acts related to
trading in domestic market
Shop and establishment act
The Trade & Merchandise Marks Act, 1999
Laws relating to Employment
Contract Labour (Regulation and Abolition) Act, 1970
Inter-State Migrant Workmen (Regulation of
Employment and Conditions of Service) Act, 1979
Minimum Wages Act, 1948
4

5. Documents/laws/acts related to
trading in domestic market
Payment of Bonus Act, 1965
Payment of Gratuity Act, 1972
Payment of Wages Act, 1936
Workmen’s Compensation Act, 1923
Industrial Dispute Act, 1947
Environment (Protection) Act, 1986
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6. Register the Company's Name
 Reserve the company's name with the Registrar
of Companies.
 ID proof, PAN Card, Address Proof is needed
along with the application form + registration
fee to get the certificate of incorporation that
legally approves the name of your business.
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7. Tax Account Number(TAN)
 Obtain a TAN from an authorized agent approved by
the National Securities Depository Limited.
 TAN is required of anyone responsible for collecting
tax.
 The application form is available at
www.incometaxindia.gov.in and www.tin-nsdl.com
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8. Permanent Account Number
 Application for PAN s.b. submitted to an
authorized franchise approved by the National
Securities Depository or the Unit Trust of India
Investors Services
 PAN is essential for tax purposes
 Mandatory while opening a business account or
while applying for a loan
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9. Registration Act
 Objective : to ensure information about all land
related so that correct land records could be
maintained.
 Also used for recording of transactions relating to
other immovable property
 provides for registration of supporting documents
which give these documents more authenticity
 Registering authorities are present in all the districts
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10. Indian Stamp Act 1899
 Original purpose was to raise revenue to Govt.
 However, today stamped document is considered much
more authentic and reliable than an un-stamped document
 Instruments chargeable to duty under the Stamp Act which
are not duly stamped are inadmissible in a court of law and
have no evidentiary value.
 a penalty of up to 10 times the original stamp value has to
be paid to rectify them
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11. The Easement Act 1882
 governed by the Easements Act, 1882
 the right of easement is derived from the ownership of
property
 It means a right which the owner or occupier of land
possesses for the beneficial enjoyment of that land and
which permits him to do or to prevent something from
being done in respect of certain other land not his own.
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12. The Easement Act 1882
 an easement may be acquired by the owner of
immovable property, i.e. the “dominant owner”, or on
his behalf by the person in possession of the property.
 Such a right may also arise out of necessity or by virtue
of a local custom.
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13. Shops and Establishment Act
 retail stores are governed by various Shops and
Establishments Acts as applicable in the states
 These acts regulate the conditions of work and
employment in shops and generally prescribe obligations
in respect of inter alia
registration,
opening and closing hours,
daily and weekly working hours,
holidays, leave,
health and safety measures
wages for overtime work
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14. The Trade & Merchandise Marks Act,
1999
 TRIPS defines Trademarks as any sign, or any combination
of signs that can distinguish the goods and services of one
organization from the other organization.
 TRIPS provides for initial registration and each renewal for
a term of ten years
 The Trade and Merchandise Act 1999 is compatible with
TRIPS and harmonizes it with international systems and
practices
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*Trade Related Intellectual Property Rights

15. Laws relating to Employment
 A retail organization is governed by the provisions of
the Employees’ Provident Funds Act, 1952.
 this act mandates periodic contributions to the
Employees’ Provident Fund Scheme and the
Employees’ Pension Scheme as applicable
 The firm also has to make contributions under the
Employees’ State Insurance Act, 1948
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16. Employees Provident Funds Act, 1952
 applicable to any estt. employing 20 or more persons
 provides for compulsory Provident Fund for the
benefit of employees in factories and other estts.
 Employer’s contribution to be deposited to the EPF is a
specified %age of the employee’s salary
 employee’s contribution = employer’s contribution
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17. Employees State Insurance Act, 1948
 Provides for benefits to employees in case of
sickness, maternity, employment injury, etc.
 Every estt. must register within the specified time
and in the specified manner
 All employees in the estt. to which this act applies
shall be insured
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18. Employees State Insurance Act, 1948
 The contribution payable = employer’s +
employee’s @ decided by the Central Government
and payable to the ESIC
 Contribution has to be made for all employees,
whether directly or indirectly employed by the firm
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19. Contract Labour (Regulation and
Abolition) Act, 1970
 This legislation applies to every estt./contractor in
which 20 or more workmen are employed or were
employed in the past 12 months as contract labour
 Registration of an estt. is mandatory through an
application to the registering authority
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20. Contract Labour (Regulation and
Abolition) Act, 1970
 Employer/each contractor in relation to each
employer have to obtain a license from Govt.
licensing officers to execute any work through
contract labour
 The license may impose conditions as to work,
fixation of wages and other essential amenities in
respect of contract labour
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21. Contract Labour (Regulation and
Abolition) Act, 1970
 The Act provides for the welfare of the workers by
imposing obligations on the employer to provide
for canteens, rest rooms, washing facilities etc.
 Non-adherence to this this act is punishable with
imprisonment or with fine
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22. Inter-State Migrant Workmen (Regulation of
Employment and Conditions of Service) Act, 1979
 regulates the employment of inter-state migrant
workmen and provides for their conditions of
service
 applicable to every estt./contractor employing 5 or
more inter-state migrant workmen currently or
have employed in the past 12 months
 The estt. has to apply for the registration of the
estt. in the prescribed manner and time
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23. Inter-State Migrant Workmen (Regulation of
Employment and Conditions of Service) Act, 1979
 The contractor has to obtain the license from the
licensing officer appointed by the Central/State
Govt.
 The license is valid only for a specified period and
requires to be renewed at its expiry
 The Act levies some duties on the principal
employer and the contractor
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24. Inter-State Migrant Workmen (Regulation of
Employment and Conditions of Service) Act, 1979
 principal employer provides for the displacement
allowance and journey allowance
 contractor provides for adequate wages, medical
facilities and other benefits
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25. Minimum Wages Act, 1948
 applicable to any person who employs 1 or more
person in any scheduled employment
 The employment can be direct or indirect
 AIM of this act is to prevent exploitation of labour
and to provide sustenance and maintenance of
the worker and his family
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26. Payment of Bonus Act, 1965
 Objective : distribution of profits earned by the
estt. among the workmen
 applicable to every estt. in which 20 or more
persons are employed on any day during an
accounting year
 An employer is bound to pay every employee a
minimum bonus of 8.33% of the salary or wage
earned by the employee. 26

27. Payment of Gratuity Act, 1972
 applicable to any estt. in which 10 or more
employees are employed or were employed on
any day in the preceding 12 months
 An employee should be in uninterrupted service
(as per conditions laid down in the Act) in order to
be paid gratuity
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28. Payment of Gratuity Act, 1972
 Gratuity shall be payable after the completion of 5
years of continuous service upon the termination
of his employment on superannuation or
retirement or resignation
 in case of death of an employee it is payable to the
nominee of the employee
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29. Payment of Wages Act, 1936
 “every employee has a right to receive
remuneration for the services provided by him
 applies to persons employed in any estt. either
directly or indirectly
 AIM : to ensure that the wages are paid by the
employers within the prescribed time limit w/o any
unauthorized deductions
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30. Workmen’s Compensation Act, 1923
 Provides for protection from hardship faced by
workmen due to accidents, death or occupational
diseases
 Provides for assistance to the family members of
the workmen
 An employer has to pay compensation for the
personal injury caused to a workman by accident,
death, etc. arising out of and in the course of his
employment
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31. Workmen’s Compensation Act, 1923
 A contractor for construction of building is also
made liable for the personal injuries of his
workmen
 amount of compensation depends on the nature
and extent of the injury
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32. Industrial Dispute Act, 1947
 Objective : to investigate and settle disputes
between the employer and the workmen
 It is applicable to any industry wherein systematic
activity is being carried on by cooperation between
an employer and his workmen (direct/indirect)
 Arbiters  Works Committee, Boards of
Conciliation, Courts of Inquiry, Labour Courts and
National Tribunals
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33. Environment (Protection) Act, 1986
 Provides for standards for emission or discharge
of environmental pollutants from various sources
 restricts areas in which operations or processes
cannot be carried out or shall be carried out
subject to certain safeguards
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34. Info gathered from a store owner
in Patna, Bihar
The documents required for trading in
domestic market:
1.CST
2.BIHAR VAT
3.LABOUR CERTIFICATE
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35. STEP 1
 Any shop has to apply for sales tax registration with
that sales tax office in whose circle that shop falls in
 Patna has 6 circles implying 6 offices
 Both CST and Bihar VAT registration(5%) is done at
the same Sales Tax Office
 CST and LST has to be paid before 15th of next month
else there is a penalty of 1.5% per month on the
unpaid amount of tax
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36. Returns…..
 Quarterly RETURNS have to be filed by 31st of next
month.
 The return includes the details of the goods
bought as well as goods sold during the quarter
 also includes the details of the CST and LST (Bihar
VAT) paid during the previous quarter
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37. Docs required while applying for
sales tax no.
a) 2 Identity proof  PAN Card, Driver’s Licence,
Voter ID, etc.
b) Address proof of the commercial property
from where store shall operate
 If property is self owned, attach the property
papers
 If property is rented, attach the copy of rent
agreement
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38. Docs required while applying for
sales tax no.
c) Municipality receipt to be submitted whether
the shop is self owned or rented
d) Bank statement of the Current A/C held
e) In case of CST, 2 such guarantors are required
who belong to the same circle/city and who
have been paying their taxes since at least 6
months
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39. Road Permit & ‘C’ Form
 For inter-state purchase, CST licence is a must.
 If we buy from local distributor, then CST is not required.
 When we place an order to a brand AND it’s the case of
inter-state purchase, we send them the road permit (form
D-IX).
 (Separate road permit is required for each order)
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40. Road Permit & ‘C’ Form
 At the end of the quarter, we have to send the C
form to the brand. (The C form is issued by the
Sales Tax Office upon verification of the CST and LST
paid during the previous quarter against the goods
bought and sold during the previous quarter)
 Against the C form, a CST of 2% has to be paid.
 In absence of C form, a CST of 5% has to be paid.
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