Compliances for Retail Industry

Whether you are into retail business or thinking of starting one or just curious to know the compliances for retail industry……you are at right place.

Retail business is a business selling their products or services to the end user/ in retail, for example grocery store, book shop, confectionary, chemist shop etc.

This is a huge sector that consists more than 10% of India’s GDP, majorly consists FMCG, apparel and footwear. Retail sector is expected to grow by 9% CAGR till 2030.

Indian Retail sector is undeniably required to comply with many compliances for retail industry. While it is very complex and wide subject, in this blog we will discuss key compliances applicable to retail industry. For the ease we have classified the compliances in different categories in the light of size and type of industry.

Secretarial Compliances

Secretarial compliances cover the corporate governance aspect that requires the business to comply with both legal and regulatory obligations to ensure the transparency, accountability and legal conformity of business operations.

The main law for secretarial compliances is The Companies Act 2013 which comprises various rules as well, to deal with compliance obligations pertaining to different aspects such as Incorporation, Powers of the Board of Directors, qualification of Directors, Audit, Corporate Social Responsibility etc.

Following are key illustrative rules under The Companies Act 2023:

• Companies (Incorporation) Rules, 2014
• Companies (Meetings of Board and its Powers) Rules, 2014
• Companies (Appointment and Qualification of Directors) Rules, 2014
• Companies (Audit and Auditors) Rules, 2014
• Companies (Accounts) Rules, 2014
• Companies (Corporate Social Responsibility) Rules, 2014
• Companies (Management and Administration) Rules, 2014
• Companies (Registration of Charges) Rules, 2014
• Companies (Share Capital and Debentures) Rules, 2014 and Companies (Significant Beneficial Owners) Rules, 2018
• Companies (Acceptance of Deposits) Rules, 2014

Labour

Labour is a subject mentioned in concurrent list of Constitution of India, which means that both Central and State government can make laws related to Labour. Hence there are many laws made by both state and central governments time to time. These laws deal with different aspects pertaining to Labour such as Minimum wage, Bonus, Gratuity, Child Labour, Provident Fund, Maternity Benefits etc.

Following is the illustrative list of Labour Compliances

• Minimum Wages Act, 1948
• Payment of Bonus Act, 1965 and Payment of Bonus Rules, 1975
• Payment of Gratuity Act, 1972
• Contract Labour (Regulation and Abolition) Act, 1970
• Maternity Benefit Act, 1961
• Child and Adolescent Labour (Prohibition and Regulation) Act, 1986
• Employees’ State Insurance Act, 1948 (ESI Act), Employees’ State Insurance (General) Regulations, 1950 and Employees’ State Insurance (Central) Rules, 1950
• Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules 2013
• The Apprentices Act, 1961 and The Apprenticeship Rules, 1992

Taxation

This category includes various laws related to Direct as well as Indirect Taxes that a business is supposed to comply with. Following is the list of illustrative Taxation laws in India:

• Income Tax Act, 1961 and Income Tax Rules, 1962,
• State GST Acts (Such as Uttar Pradesh Goods & Services Tax Act, 2017)
• Central GST Act, 2017 and Central GST Rules, 2017
• State Excise Act
• The Customs Act 1962

Environment, Safety & Health

This category of legislation covers the aspects related to pollution, waste management, health hazard substances etc. Main legislation that covers majority of these aspects is Environment (Protection) Act, 1986, which has few rules to govern the environmental, safety as well as health related issues. Illustrative list is as follows:

• E-Waste (Management) Rules, 2016
• Environment (Protection) Rules, 1986
• Noise Pollution (Regulation and Control) Rules, 2000
• Plastic Waste Management Rules 2016
• Solid Waste Management Rules, 2016
• Battery Waste Management Rules, 2022

Industry Specific laws

This category consists of laws specifically related to a particular industry. Following is the list of a few illustrative laws:

Food Industry:

• Food Safety & Standards Act, 2006 and Food Safety & Standard Rules, 2011.
• Food Safety and Standards (Licensing and Registration of Food Businesses) Regulations, 2011
• Food Safety and Standards (Packaging) Regulations, 201

Medical Pharmacy:

• The Pharmacy Act 1948
• Drugs and Cosmetic Act 1940 and Rules 1945

Chemical Industry:

• Manufacture, Storage and Use of Hazardous Chemicals Rules (MSHC Rules), 1989
• Hazardous Substances (Management and Handling) Rules, 1982
• Pesticides Act, 1978