Delhi municipal body integrates general trade licence with property tax system

This will reduce the compliance burden on hundreds of trades which are covered by the licensing regime, officials said

New Delhi

An MCD House session in progress on Tuesday. (Arvind Yadav/HT Photo)

The Municipal Corporation of Delhi (MCD) on Tuesday approved the integration of the general trade and storage licence with the property tax system, under which the general trade licence fee will be charged at 15% of the property tax of the premises and can be paid at the time of paying the annual property tax.

This will reduce the compliance burden on hundreds of trades which are covered by the licensing regime, officials said. The general trade licence and storage licence regime covers more than 463 types of trades, ranging from local grocery shops, pan shops, animal food, art galleries to special trades, such as showrooms, retail outlets, warehouses and godowns.

Mayor Raja Iqbal said termed the move a “landmark reform” which would strengthen the ease of doing business framework in Delhi. “In a major decision passed in the MCD House, the General Trade/Storage License (GTL) issued under Section 417 of the DMC Act will now be subsumed within the property tax payment system, eliminating the need for a separate application or licence document. With this decision, traders and business owners will now be able to pay their trade licence fee simultaneously with their annual property tax,” he said.

The payment receipt will carry an endorsement and will be treated as a valid licence, subject to compliance with pollution, fire safety, and other statutory norms required by the authorities concerned.

In its proposal, the MCD said that the change will “reduce licence permit raj” and yet “protect the revenue of MCD.”

Currently, the licence fee is charged based on the type of trade, area of the premises, and category of the locality where the outlet is situated. “The inspector tends to visit the trade premises on the pretext of ascertaining above factors. Fee structure is also complicated... It will be appropriate if licence fee is charges as percentage of property tax,” the proposal reads.

Although a large number of trades need general trade licence, the compliance has remained low.

According to MCD data, in the ongoing fiscal, 34,048 general trade licences have been issued with a total licence fee of ₹56.66 crore, while property tax of ₹289 crore was collected from these properties. Also, ₹54.07 crore was collected in 2,059 special trade licences, while property tax of ₹883.96 crore was collected.

The general trade licence fee was around 20% of the property tax while the special licence fee was around 6.12%. “It is estimated that there is revenue leakage ...It is estimated that the MCD may not incur revenue loss of trade licence fee is collected at 15% of property tax,” the proposal from the central licensing and enforcement cell read.

Mayor Singh said, “This historic decision will bring immense relief to the business community of Delhi by removing redundant processes and curbing avenues for harassment. By merging the licensing process with property tax, the MCD has made the system simpler, more transparent, and truly business-friendly. This move will reduce compliance burden without compromising safety norms or revenue responsibilities.”