Business Licensing in New Delhi
These information pages can help you get started in learning about some of the laws and registration requirements that may apply to your Trips or Experiences on Airbnb. These pages include summaries of some of the rules that may apply to different sorts of activities, and contain links to government resources that you may find helpful.
Please understand that these information pages are not comprehensive, and are not legal advice. If you are unsure about how local laws or this information may apply to you or your Experience, we encourage you to check with your city or an attorney.
Please note that we don’t update this information in real time, so you should confirm that the law has not changed recently.*
When am I a “business” or conducting a "trade"?
The word “trade” or “business” usually refers to a commercial activity carried out with the aim of earning money or getting some perks. Businesses and trade activities are regulated by law. Generally, a business refers to an activity that is conducted on a regular basis over a period of time. For instance, selling goods in a shop is an everyday affair and not a one-off activity. However, at times, a single and isolated activity (for instance, singing at a concert once in awhile for money) could be considered a business under Indian law. We encourage you to consult a legal advisor for guidance. You may also refer to our information page on guiding tours if your Trips or Experiences involve touring.
What if I am a business - what things should I be thinking about? Do any business registration / licensing obligations apply?
You will need to consider the following:
Registrations and Trade Licenses
In general, if you are operating out of a physical premises, you may need to register your establishment under the Delhi Shops and Establishment Act, 1954. Examples of an establishment include, a shop, restaurant, eating-house, theatre and art gallery.
In addition, depending on the activity being carried out at a premises, you may also need to get a trade license under the Delhi Municipal Corporation Act, 1957. Some activities that require trade licenses include baking, candle making, pottery and carpentry. More information on applying for a trade license may be found North Delhi Municipal Corporation website.
You may face consequences (for instance financial penalties) if you do not obtain relevant registrations/ licenses or are non-compliant with these laws.
Here are some examples of when you are unlikely to be required to obtain registration or a license:
- You host a 2 day baking class Experience in licensed cooking studios, depending on which cooking studio has availability.
- You host a food tasting Experience at multiple restaurants/cafes/stalls around Delhi over a period of three days.
Here is an example of when you are likely to be required to obtain registration or a license:
- You host a yoga class Experience at your house on a regular basis.
Even if you do not have a fixed premises from where you are offering your Experience, your place of residence may still be considered an establishment or trade premise under the law. We encourage you to consult a legal advisor to ensure that you are complying with the laws.
Activity specific licenses
Depending on the activity you will be providing or organising, you may need to register, obtain licenses, or follow specific rules that apply to that activity. For instance, food and alcohol tasting sessions or touring related Experiences or Trips may require certain permits. Our section on activity specific licensing requirements and rules covers some of the typical activities, but is not intended to be comprehensive. You should always seek advice from a legal professional.
Tax, accounting and insurance
You should also check what tax and accounting rules apply to you, as you may need to pay personal income tax, service tax, sales tax and VAT in addition to business property tax. If you are conducting a business, you may need to obtain the following registrations for tax purposes:
- PAN (Permanent Account Number) from the Income Tax Department
- Service Tax registration
- Sales Tax registration
- VAT (Value Added Tax) Registration from the State Government
The above is only an indicative list. Please check with a tax advisor / accountant for guidance on tax registration requirements as failure to pay taxes is an offence. Also make sure you have the right insurance in place to cover all the activities you will be providing.
What legal structure could I choose to use if I am a business?
You may consider one of the following options:
- Sole proprietorship
- Private limited company
- Limited liability partnership
Each legal structure has its own advantages and disadvantages and we recommend that you consult a legal advisor for guidance on selecting the appropriate option for you. You may also refer to this website for helpful pointers.
Is there anything else I should keep in mind?
Yes. You should consider the following:
Carrying on activities from your home
Certain residents associations such as housing societies and resident welfare associates in New Delhi prohibit the conduct of commercial activities from home under their bye-laws. If you live in a residential premises, you should check that there are no restrictions on offering commercial activities from your house. If you are living in leased premises, check for such conditions in your lease. If you have registered your establishment under The National Capital Territory of Delhi (Incredible India) Bed and Breakfast Establishments (Registration and Regulation) Act, 2007, then you may need to comply with the obligations under such law as well.
Carrying on commercial activities from third party premises
You should check that the premises is suitable to offer your activity. This could include checking on whether the third party premises (for instance clubs for pub crawls) have necessary permits, municipal licenses and are safe overall (especially for women and foreigners). You should also consider entering into contractual arrangements with the authorized personnel at such third party premises.
Employees and consultants
If you hire employees or consultants, various labor laws may become applicable. Please consult a lawyer / labor law consultant for advice.
Consumer Protection laws
The Consumer Protection Act, 1986, requires that you do not engage in unfair trade practices or offer deficient services. In particular, you need to ensure that your Trip or Experience listings are accurate, and you offer the services in the manner and for the price that was advertised.
*Airbnb is not responsible for the reliability or correctness of the information contained in any links to third party sites (including any links to legislation and regulations).
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