30-fold Reduction in Penalty Rates
Kerala’s municipal corporations have introduced a major reform in the penalty structure for delayed renewals of trade, commerce, business, and service licenses. Previously, penalties were unscientifically high, with fines accumulating to 25% of the annual license fee for every 10-day delay and an additional 25% for every subsequent 15-day delay. Under the new rules, the penalty has been drastically reduced.
Now, even if the renewal is delayed by up to one year, only 20% of the annual fee will be charged. For delays beyond one year, a 25% penalty will apply for each additional year. This change reduces the penalty by 30 times compared to earlier rates.
For instance, a license fee of Rs 1,000 would previously incur a penalty exceeding Rs 6,000 after a year’s delay. Under the new rules, the penalty will be only Rs 200, significantly relieving businesses.
New Provisions Under Kerala Municipality Act
The revised penalty structure is governed by Section 11(4) of the Kerala Municipality Act. A key requirement of the new rules is that license renewal applications must be submitted at least 30 days before the license’s expiration date to avoid penalties.
Simplified Process Through K-Smart
The state has also simplified the renewal process by leveraging the K-Smart platform. This change aims to reduce bureaucratic hurdles and make the process more efficient for businesses.
