Start Your Business Legally: Your Guide to Applying for GST and Trade Licence in India

Starting a business in India comes with exciting opportunities, but also important legal responsibilities. Two crucial registrations you’ll likely need are GST (Goods and Services Tax) registration and a Trade Licence. These licences ensure your business operates legally, builds credibility, and avoids potential penalties. In 2025, understanding how to obtain these licences is vital for every entrepreneur. This guide will walk you through how to apply for GST and a Trade Licence in India, covering eligibility, step-by-step application processes (online and offline), required documents, fees, and key points to remember to set your business up for success, legally.

Understanding GST Registration: A Must for Many Businesses

What is GST?

GST, or Goods and Services Tax, is an indirect tax levied on the supply of goods and services in India. It’s a comprehensive, multi-stage, destination-based tax that has replaced many previous indirect taxes in India.

Why is GST Registration Important?

• Legal Compliance: If your business meets the threshold criteria, GST registration is legally mandatory. Operating without it can lead to penalties and legal issues.
• Input Tax Credit (ITC): GST registration allows you to claim Input Tax Credit on your purchases. This reduces your overall tax liability and can significantly impact your profitability.
• Business Credibility: GST registration enhances your business credibility and reputation. It allows you to issue valid tax invoices, which is essential for dealing with larger businesses and government contracts.
• Inter-state Business: If you are involved in inter-state supply of goods or services, GST registration is generally required, regardless of your turnover.
• E-commerce Operations: If you sell through e-commerce platforms, GST registration is often necessary.
• Bank Account and Loans: GST registration is frequently required to open a business bank account and to be eligible for business loans.

Who Needs to Register for GST?

Generally, businesses need to register for GST if their aggregate turnover in a financial year exceeds a certain threshold limit. As of 2025, the standard threshold limit is ₹20 lakhs (₹10 lakhs for special category states – check the latest updated list of special category states).

However, compulsory GST registration is required even if your turnover is below the threshold in certain cases, such as:

• Businesses involved in inter-state supply of goods.
• Businesses operating through e-commerce operators.
• Businesses required to pay tax under reverse charge mechanism.
• Non-resident taxable persons.
• And others – refer to the latest GST regulations for a complete list of compulsory registration categories.

Types of GST Registration:

• Regular Taxpayer: For most businesses, involving regular tax payments and compliance.
• Composition Scheme: A simplified scheme for small businesses with turnover up to a certain limit (currently ₹1.5 crore, subject to change). It offers lower tax rates but restricts Input Tax Credit benefits and inter-state supply.

Determine if GST registration is applicable to your business based on turnover and nature of operations. If required, proceed with the GST registration process.

Step-by-Step Process to Apply for GST Registration Online in India (2025)

GST registration is primarily an online process through the official GST portal. Here’s a step-by-step guide:

1. Visit the GST Portal: Open your web browser and go to the official GST portal: https://www.gst.gov.in/
2. Start New Registration (Part A):
   • On the GST portal homepage, navigate to “Services” > “Registration” > “New Registration”.
   • Select “New Registration” and choose “Taxpayer” as the type of applicant.
   • Select your State and District.
   • Enter your Business Legal Name (as per PAN card).
   • Enter your Permanent Account Number (PAN).
   • Enter your Email Address and Mobile Number. Ensure these are active and you have access to them as OTPs will be sent for verification.
   • Select the Captcha code and click “Proceed”.
3. OTP Verification (Part A):
   • You will receive One-Time Passwords (OTPs) on your email and mobile number.
   • Enter both OTPs in the designated boxes on the GST portal and click “Proceed”.
   • Upon successful verification, a Temporary Reference Number (TRN) will be generated and displayed. Note down this TRN as it is crucial for completing Part B of the registration.
4. Complete Part B of Registration:
   • Click on “Services” > “Registration” > “New Registration” again.
   • Select “Temporary Reference Number (TRN)”.
   • Enter your TRN and the Captcha code. Click “Proceed”.
   • You will receive another OTP on your registered mobile number and email. Enter it and click “Proceed”.
   • The “My Saved Applications” dashboard will open. You will see your TRN application listed with an “Edit” icon. Click on the “Edit” icon (pencil icon).
   • This opens Part B of the GST registration form. This is a detailed form with multiple sections. You need to fill in information accurately in each section, including:
     • Business Details: Trade name, business constitution, principal place of business address, nature of business activity, etc.
     • Promoters/Partners Details: Details of promoters, partners, directors, Karta, Managing Committee members, etc., including personal information, PAN, Aadhaar, photographs.
     • Principal Place of Business Address: Complete address details, including supporting documents as address proof.
     • Additional Places of Business: If you have more than one place of business, add details here.
     • Goods and Services: Specify the main goods and services your business deals in (HSN codes for goods, Service Accounting Codes for services).
     • Bank Account Details: Bank account number, IFSC code, bank name, branch address.
     • State Specific Information (if applicable).
     • Aadhaar Authentication: You will be prompted to opt for Aadhaar authentication for faster processing. This involves verifying your Aadhaar details via OTP. Aadhaar authentication is generally recommended for quicker processing.
5. Upload Documents: In the relevant sections of Part B, you will need to upload scanned copies of required documents. Ensure documents are in the specified format and size. Common documents include:
   • PAN Card of the Business/Entity
   • Proof of Principal Place of Business: Rent Agreement (if rented), Property Tax Receipt, Electricity Bill, Consent Letter, etc. Acceptable documents vary based on business premises ownership. Check GST portal guidelines.
   • Bank Account Details: Scanned copy of first page of bank passbook or bank statement or cancelled cheque showing account number, IFSC, and account holder details.
   • Identity and Address Proof of Promoters/Partners/Directors: PAN card, Aadhaar card, Passport, Voter ID, Driving Licence.
   • Photographs of Promoters/Partners/Directors.
   • Authorisation Letter/Board Resolution: For companies, LLPs, partnerships, authorizing a signatory for GST registration.
   • Digital Signature Certificate (DSC): DSC is mandatory for Companies and LLPs. For other entities, e-Verification through Aadhaar OTP or EVC (Electronic Verification Code) is also available.
6. Submit Application and E-Verification:
   • After filling Part B and uploading documents, review all details carefully.
   • Choose your Verification method:
     • Digital Signature Certificate (DSC): Mandatory for Companies and LLPs.
     • e-Verification Code (EVC)
     • Aadhaar based e-Sign: (OTP based Aadhaar authentication – often recommended for individuals and partnerships for faster processing).
   • Submit your application using the chosen verification method.
   • Upon successful submission, an Acknowledgement Reference Number (ARN) will be generated and sent to your registered email and mobile number. Note down this ARN to track your application status.
7. GSTIN Issuance and Verification:
   • After submission, your GST application will be processed by GST officers. They may raise queries or seek clarifications online. Respond to any queries promptly through the GST portal.
   • If your application is approved, a GST Identification Number (GSTIN) will be issued to you. You can download your GST Registration Certificate from the GST portal.
   • You can track your application status on the GST portal using your ARN.

Documents Required for GST Registration (Indicative List – May Vary Based on Business Type)

The documents required for GST registration vary slightly depending on the legal constitution of your business. Here’s a general list:

For Proprietorship:

• PAN Card of the Proprietor
• Aadhaar Card of the Proprietor
• Photograph of the Proprietor
• Proof of Principal Place of Business (Rent Agreement/Lease Deed, Electricity Bill, Property Tax Receipt, etc.)
• Bank Account Details (Cancelled Cheque/Passbook/Bank Statement)

For Partnership Firm/LLP:

• PAN Card of the Partnership Firm/LLP
• PAN and Aadhaar of all Partners/Designated Partners
• Partnership Deed/LLP Agreement
• Incorporation Certificate of LLP (for LLP)
• Photographs of Partners/Designated Partners
• Proof of Principal Place of Business
• Bank Account Details
• Authorisation Letter signed by all partners authorizing one partner to act for GST registration.

For Companies (Private/Public Limited):

• PAN Card of the Company
• Certificate of Incorporation (COI)
• PAN and Aadhaar of Directors
• Memorandum of Association (MOA) / Articles of Association (AOA)
• Photographs of Directors
• Proof of Principal Place of Business
• Bank Account Details
• Digital Signature Certificate (DSC) of Authorised Signatory
• Board Resolution authorizing a director to act as Authorised Signatory for GST registration.

This is an indicative list. Refer to the GST portal and guidelines for the complete and most updated list of required documents based on your specific business type and state.

Understanding Trade Licence: Permission to Operate Locally

What is a Trade Licence?

A Trade Licence is a permission or license issued by the Municipal Corporation or local civic body to allow businesses to carry out specific trade or business activities within their jurisdiction. It’s essentially a local level license to operate a business from a fixed premises.

Why is a Trade Licence Required?

• Legal Requirement: Most states and municipal corporations mandate obtaining a Trade Licence to conduct business legally within their area. Operating without it can lead to penalties and closure notices.
• Regulation of Trade Activities: Trade Licences help the local authorities regulate various trade and business activities, ensuring they are conducted in a planned and orderly manner.
• Zoning and Land Use Compliance: It ensures that businesses are operating in zones designated for commercial activities and comply with land use regulations.
• Public Health and Safety: For certain types of businesses (e.g., restaurants, factories), Trade Licences often involve checks and clearances related to public health, safety, and environmental norms.
• Civic Amenities and Infrastructure: Trade Licence revenue can contribute to the local body’s funds, which are used for maintaining civic amenities and infrastructure in the area.

Who Needs a Trade Licence?

Generally, almost all types of businesses operating from a fixed location within a municipal area require a Trade Licence. This includes shops, commercial establishments, factories, restaurants, hotels, service providers, and many others. However, some categories may be exempted (e.g., certain professions, home-based businesses below a certain scale).

Check with your specific Municipal Corporation or local body to determine if your business requires a Trade Licence and if any exemptions apply.

Issuing Authority and Validity:

• Issuing Authority: Municipal Corporation, Municipality, or local civic body of the area where your business is located.
• Validity: Trade Licences are typically issued for a financial year (April to March) and need to be renewed annually.

Step-by-Step Process to Apply for a Trade Licence (Offline/Online – Varies by Location – 2025)

The application process for a Trade Licence can be either offline or online, depending on the specific Municipal Corporation or local body. Online application facilities are becoming increasingly common in many cities.

1. Check for Online Application Availability:

• Visit the Website of your Municipal Corporation/Local Body: Search online for the official website of your city’s Municipal Corporation, Municipality, or local civic body.
• Look for “Trade Licence” or “Business Licence” Section: Navigate the website to find sections related to “Trade Licence”, “Business Licence”, “Licences”, or “Online Services”.
• Check for Online Application Option: See if there is an option to apply for a “New Trade Licence” or “Online Trade Licence Application”. If available, online application is generally recommended for convenience.

2. Online Application for Trade Licence (If Available):

• Visit the Municipal Corporation Website and Find Trade Licence Section.
• Online Registration/Login: You may need to register on the portal or login if you already have an account.
• Fill Online Application Form: Fill the online application form accurately. Details typically required include:
  • Business Name and Address
  • Nature of Business Activity (detailed description of your business operations)
  • Category of Trade/Business (as per the categories defined by the Municipal Corporation)
  • Applicant Details (Name, Address, Contact Information of business owner/authorised person)
  • Premises Details (Owned/Rented, Area of Premises, etc.)
• Upload Documents Online: You will need to upload scanned copies of required documents. Common documents include:
  • Business Address Proof: Rent Agreement (if rented), Property Tax Receipt (if owned), Lease Deed, Utility Bill (Electricity/Water bill in business name), No Objection Certificate (NOC) from Landlord if rented. Check specific documents accepted by your Municipal Corporation.
  • Identity Proof of Applicant: Aadhaar Card, PAN Card, Voter ID, Driving Licence, etc.
  • Business PAN Card.
  • Incorporation Certificate (for Companies/LLPs).
  • Photographs of Business Premises (exterior and interior).
  • No Objection Certificates (NOCs) from other departments (e.g., Fire Department, Health Department, Pollution Control Board) – May be required depending on the nature of your business. Check local regulations.
• Online Fee Payment: Pay the Trade Licence fee online through the portal using available payment methods (net banking, credit/debit card, UPI). Note down the transaction details and payment receipt.
• Submit Application and Acknowledgement: Submit the online application. You will usually receive an online acknowledgement receipt with an application reference number. Keep this for tracking.
• Track Application Status Online: Many online portals allow you to track the status of your Trade Licence application using the reference number.
• Download Licence (if Approved Online): If your application is approved online, you may be able to download your Trade Licence certificate directly from the portal.

3. Offline Application for Trade Licence (If Online Not Available or Preferred):

• Visit Municipal Corporation/Local Body Office: Go to the relevant office of your Municipal Corporation or local body in your area. Locate the department that handles Trade Licences (often called Licence Department, Health Department, or Revenue Department).
• Obtain Application Forms: Get the prescribed Trade Licence application forms from the designated counter.
• Fill the Forms: Fill out the application forms completely and accurately. Provide all required business and applicant details as per the form.
• Attach Documents: Attach photocopies of all required documents as per the checklist provided with the application form. Carry original documents for verification if required. Common documents are similar to those listed for online application (Address Proof, ID Proof, Business PAN, NOCs, etc.).
• Submit Application and Documents: Submit the completed application form and attached documents at the designated counter at the Municipal Corporation office.
• Fee Payment at Counter: Pay the Trade Licence fee at the cash counter. Obtain a receipt for the fee payment.
• Acknowledgement Receipt: Get an official acknowledgement receipt for your application submission. Note down the application number or reference number for future follow-up.
• Follow-up and Collect Licence: Enquire about the expected processing time for the Trade Licence. You may need to follow up with the Municipal Corporation office after the specified period to check the status of your application. Once approved, you will usually need to collect the Trade Licence certificate from the office. Some Municipal Corporations may send the licence by post.

Documents Required for Trade Licence (Indicative List – Check with Your Local Municipal Corporation)

The specific documents required for a Trade Licence application can vary significantly depending on the state, city, and the specific rules of your Municipal Corporation or local body, as well as the nature of your business. Always check the exact requirements from your local authority. However, common documents generally include:

• Proof of Business Address:
  • Rent Agreement (if business premises is rented)
  • Lease Deed (if leased)
  • Property Tax Receipt (if business premises is owned)
  • Utility Bill (Electricity Bill, Water Bill, in the name of the business owner or landlord with NOC)
  • No Objection Certificate (NOC) from Landlord (if rented premises) – Prescribed format may be required.
• Identity Proof of Applicant/Business Owner/Authorised Person:
  • Aadhaar Card
  • PAN Card
  • Voter ID Card
  • Driving Licence
  • Passport
• Business PAN Card: PAN card in the name of the business entity (proprietorship, partnership, company, LLP).
• Incorporation Certificate: Certificate of Incorporation (COI) issued by the Ministry of Corporate Affairs – For Companies and Limited Liability Partnerships (LLPs).
• Photographs: Passport-sized photographs of the applicant/authorised person and sometimes photographs of the business premises (exterior and interior).
• No Objection Certificates (NOCs) from other Departments: Depending on the nature of your business, you may need NOCs from departments like:
  • Fire Department: Especially for businesses involving fire hazards, restaurants, factories, etc.
  • Health Department: For food businesses, healthcare establishments, etc.
  • Pollution Control Board: For industries that may cause pollution.
  • Check with your Municipal Corporation if NOCs are required for your business type.
• Affidavit/Undertaking: Self-declaration or undertaking in a prescribed format may be required.
• Layout Plan of Premises: For certain types of businesses, a layout plan of the business premises may be needed.
• Other Specific Documents: Depending on the nature of business, additional documents may be required (e.g., for specific industries like hotels, liquor shops, etc.).
• Crucially, contact your local Municipal Corporation or check their website to get the definitive list of documents required for your specific business and location. Document requirements can vary significantly between different cities and states. *

Fees for GST and Trade Licence

• GST Registration Fee: There is no fee charged by the government for GST registration. However, you may incur costs if you take professional help from tax consultants or Chartered Accountants for the registration process.
• Trade Licence Fee: Trade Licence fees vary significantly based on several factors, including:
  • Location: Fees vary from city to city and even within different zones of a city, as determined by the respective Municipal Corporations.
  • Type of Business/Trade: Different categories of businesses may have different fee structures. Riskier or more regulated businesses (e.g., hazardous industries, restaurants) may have higher fees.
  • Size of Business/Premises: The area of your business premises may be a factor in fee calculation in some locations.
  • Annual Turnover: In some cases, the annual turnover of the business might influence the Trade Licence fee.
  Trade Licence fees can range from a few thousand rupees to tens of thousands annually, depending on these factors. You will need to check the fee schedule provided by your specific Municipal Corporation or local body. Fees are typically payable annually during renewal.

Important Points to Remember for GST and Trade Licence Application

• GST is Turnover Based (Mostly): Determine if GST registration is mandatory for your business based on your aggregate turnover and the nature of your business activities. If you are unsure, it’s best to consult with a tax professional.
• Trade Licence is Location Specific: Trade Licence is issued by the Municipal Corporation or local body where your business is located. Apply to the correct authority for your business address.
• Check for Online Options: For both GST and Trade Licence, check if online application facilities are available in your area. Online processes are generally more convenient and efficient.
• Keep Documents Ready: Gather all required documents in advance before starting the application process for both licences. Ensure documents are valid and as per the specified format.
• Follow Up on Application Status: After submitting your application, keep track of the application status using the reference number provided. Respond promptly to any queries from the authorities.
• Display Licences at Business Premises: Once you obtain your GST Registration Certificate and Trade Licence, ensure they are prominently displayed at your business premises as required by regulations.
• Renew Trade Licence Annually: Trade Licences are typically valid for one financial year and must be renewed annually before expiry to ensure continuous legal operation. Keep track of renewal deadlines and initiate the renewal process in time.

Troubleshooting Common Issues

• GST Portal Issues: The GST portal can sometimes be slow or experience technical glitches. If you face issues like website slowness, errors, or OTP problems, try accessing the portal during off-peak hours or after some time. Ensure you have a stable internet connection.
• Document Upload Problems: Ensure that scanned documents are in the correct format (PDF, JPG, etc.) and within the size limits specified on the portals. If you face persistent upload issues, try using a different browser or device.
• Payment Failures: If online payment fails, check your internet connection and bank account balance. Try again using a different payment method or after some time. Note down transaction details if payment is debited but not updated on the portal, and contact the relevant helpline.
• Delays in Processing: Processing times for both GST and Trade Licences can vary. If you experience significant delays beyond the typical processing time, follow up with the GST department or Municipal Corporation office, referencing your application number.
• Whom to Contact for Help:
  • GST Registration: For GST related queries, you can contact the GST Helpdesk (details on the GST portal) or consult with a tax professional.
  • Trade Licence: For Trade Licence related queries, contact the relevant department of your Municipal Corporation or local body. Contact details are usually available on their website.

Start Your Business Legally and Grow!

Obtaining GST registration and a Trade Licence are essential steps to ensure your business operates legally and smoothly in India. By understanding the processes, preparing the necessary documents, and following the guidelines, you can navigate these registrations effectively and focus on building and growing your business with a strong legal foundation. Start your entrepreneurial journey the right way – get licensed and get growing!

Frequently Asked Questions (FAQs) on GST and Trade Licence Application in India (2025)