Starting a new business in Chennai? Here’s how to get your trade licence

Here's a detailed explainer of all that you need to apply for a trade licence in Chennai and the process involved.

The pandemic has not only been a health emergency, but also a huge blow on the economic front. Many people lost their jobs while many more have faced pay cuts. Some like R Sunitha stepped up to the challenge by starting their own business ventures. Sunitha, who lost her job, became a home chef during the lockdown. “I took it very hard initially when I lost my job. But I knew I had to pull my act together to earn during the pandemic. I applied for a trade licence and started my own food business and became a home chef,” she says.

Many like Sunitha are probably ready to channel their own abilities and interests to start a commercial venture in this city, but do not know how to start. For setting up and operating any commercial establishment in Chennai, it is mandatory to avail a trade licence. This is issued by the licensing department which is authorised and governed by the Greater Chennai Corporation (GCC).

Here is a simple explainer on how to get a trade licence if you wish to start an enterprise in any of the following domains.

Types of trade licences issued by the Chennai corporation

The city corporation has six types of licences, depending on the nature of the trade:

  1. Schedule 1: Micro cottage industries
  2. Schedule 2: Industries manufacturing and dealing with commercial items
  3. Schedule 3: Shops dealing with commercial products (small scale)
  4. Schedule 4: Shops dealing with food articles 
  5. Schedule 5: Trades dealing with food and daily essentials
  6. Schedule 6: General 

Here is a detailed list of businesses that fall under each schedule and the licence fee for every category.

Documents needed to apply for a trade licence

The city corporation has simplified the process of trade licensing for businesses such as automobile spare parts, clothing, electronic sales, electrical shop, fruits, flowers, furniture, paper, planners and builders, rice mill, tyre shop, art work, leather goods, bakery, aquarium, perfumes and granite, provided that the business requires less than 500 sq ft of space. They shall be referred to as ‘small traders’.

Applications for the above mentioned trades will receive the licence within a day of submitting the application to the Corporation’s Revenue Department.

In order to obtain a trade licence for small traders under the simplified system, the following documents should be furnished along with the licence application:

  1. Sworn affidavit in a stamp paper valued at Rs 20. Here is a model affidavit.
  2. Two passport size photographs of the applicant
  3. Copy of tax paid receipt for the trade premises
  4. Copy of national savings certificate: All applicants are mandated to open a National Savings Certificate account at the post office for a minimum sum of Rs 500 and provide a copy of the deposit certificate.
  5. Demand draft in favour of Revenue Officer, Chennai Corporation towards License fee/Conservancy charges/PFA charges as prescribed 

Those other than small traders will have to furnish the following documents along with the licence application:

  1. NOC from the owner of the trade premises in a stamp paper of Rs 20, duly attested by a notary public
  2. A photocopy of tax paid receipts of the trade premises up to date
  3. Two passport size photographs of the application
  4. Copy of national savings certificate (as explained above)
  5. NOC from the district fire officer in case the person intends to start a restaurant or tea shop or other trades that involve usage of fire
  6. NOC from the pollution control board needs to be taken for factories, manufacturing units and trades that deal with plastic waste, solid waste and hazardous waste.
  7. Demand draft in favour of Revenue Officer, Chennai Corporation towards License fee/Conservancy charges/PFA charges as prescribed
trade license is an important document to start a business in Chennai
A trade licence can be applied for by visiting the Zonal office. Pic: Laasya Shekhar

Licence issuing authority and procedure for obtaining a trade licence

The Greater Chennai Corporation issues trade licences to vendors in Chennai. The licence must be applied for at the Zonal Office of the Corporation. Here is the detailed procedure:

  • A citizen must first approach the Citizen Facilitation Counter established in the respective Zonal Office with their application form duly signed. The counter operator will feed the details of the application online.
  • Once the counter operator submits the application, the system will generate an acknowledgement slip with a registration number and send out a message to the applicant through SMS.
  • The details of the applicant shall be moved to the inbox of the Assistant Revenue Officer (ARO) of the respective zone for field verification of the site.
  • After field verification, the ARO will submit the application before the trade licence committee headed by the Zonal Officer, along with the Demand Draft towards licence fee obtained from the applicant.
  • The trade licence will be issued to the applicant through email or through postal department after the approval of the trade licence committee if the norms are complied with by the applicant. [The application will be rejected if the applicant fails to satisfy or comply with all requirements and norms]

Read more: Increasing property tax can be a gamechanger for city: DC, Revenue & Finance

What is the validity of a trade licence and how to renew it?

A trade licence is valid only for the current financial year (in which it is issued) and has to be renewed every year. Every year by March 31st, the applicant has to apply for and complete the renewal process (including payment submission) on the citizen portal. It can be done online here.

It should be noted that the trade licence can be obtained all through the year, but should be renewed between the following February 1st and March 31st.

When does one need an installation licence?

An installation licence is mandatory if the business involves the usage of machinery. This licence is given by the Town Planning Authority (TPA) of the Chennai Corporation. There is a Town Planning officer for every zone.

  1. If the capacity of the machinery used is less than 5 HP, an installation licence is not required.
  2. If the capacity is more than 5 HP, the applicant has to submit the machine specifications and the installation diagram, which is then forwarded to a council, comprised of a licence inspector and officials from the fire department, pollution control board and police department. (This council is constituted for reviewing the trade licence application for categories that do not fall under the simplified system. More than 5 HP Machinery is allowed only in the commercial zone, as per Chennai’s Master Plan, and not in a residential zone.)

When is professional tax levied on a business?

According to Section 138C of the Tamil Nadu Municipal Laws Second Amendment Act 59 of 1998, any person with a business, profession, employment and calling in the city limits of the Corporation of Greater Chennai, will have to pay the half-yearly professional tax. It will be calculated based on the gross income that is declared half-yearly as follows:

Average Monthly Income (Half-yearly/Rs.)Revised Profession Tax (Half-yearly/Rs.)
Up to 21,000NIL
21,001 to 30,000135/-
30,001 to 45,000315/-
45,001 to 60,000690/-
60,001 to 75,0001025/-
75,001 and above1250/-

The professional tax is also levied based on the number of employees in a business. The professional tax can be calculated on the GCC’s website here.

What are the documents required for Professional Tax Registration? 

  1. Shops and Establishment Trade License Copy/Registration Certificate
  2. Lease Agreement of business premises
  3. PAN Card
  4. Articles of association of the business (a document that details the regulations for the operation of a company)
  5. Memorandum of association (a legal document that is prepared while forming and registering a company) and incorporation certificate of the business (it is a legal license that is required to operate a business and is prepared during the formation of a company).

These requirements are, however, subject to changes as per directions provided by the state government from time to time.

Also read:


  1. Jayaraman VS says:

    Good explainer. But is it that easy to get the trade licence even for a small shop? Reality is something different.

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