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Dhruv Agarwal (CA)     20 April 2013

Guest house legal formalities

I am currently owning a 3 storied building (containing 5 flats) in a residential complex in Kolkata. I want to rent those flats for guest house purpose where people can stay for few days. I will provide a fully furnished flat with bed and other general necessities. I will not provide any kind of fooding. It has to be arranged by the guests itself.

I want to know the legal formalities for the same with regard to:

1) Electricity Department.

2) Local Municipality.

3) trade licence.

4) Service Tax implication.

I will be grateful if someone help me in this regard. 



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 3 Replies

Tajobsindia (Senior Partner )     20 April 2013

1.    You have to first get sanction for change of use under S. 416 from Kolkata Municipal Corporation.

2.    Then you have to contact Kolkata Metropolitan Police Licensing Unit as per Kolkatta Police Act for grant of License to run change of use residential building now into Guest House purposes.

3.    You have to take Fire clearance from Kolkata Fire Department.

4.    You have to seek Health Trade License from Civic Agency.

5.    If you want to register Guest House for tourist purposes then as per Guidelines issued in 2009 from Department of Tourism you need to register the same from local Offices of Govt. of India, Ministry of Tourism.

6.    You also need to Register Name and Style of Guest House with Service Tax authorities.

7.    You need to keep handy; Land Ownership proof / Property Papers of premises / Sale Deed/Lease Deed/Allotment Deed etc.- Rent Agreement / NOC of Landlord, if tenant. - Blue Print of the Site & Building plan.

Suggest to contact Finance head of any well established local Guest House and contract him the work for seeking license for running Guest House which is less time consuming instead of running around from one department to another as a well established Guest House ought to have done it is pre-assumption and if off the records such professional help sough I have seen they help out unofficialy on mention of reasonable professional fees basis.  

Dhruv Agarwal (CA)     20 April 2013

Thank you sir for your kind help. I will only be renting the flats to guests coming from other cities for their short stay for marriage purpose in kolkata. Then also i will have to fulfill the abovementioned formalities???

Tajobsindia (Senior Partner )     20 April 2013

1. If it is a commercial activity means you will collect some rent out of letting for short period guest rooms – facilities for purpose of say marriage which you are planning so it is obvious one needs to be on correct side of local Laws and seek respective licenses and pay service tax accordingly.

If it for charity means no commercial payment received purposes you are planning running a Guest House then I have no further comments as that is not be the case in hand and thus does not require further discussions.


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