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Karnataka Government offers suggestion for relief on Shop Act via draft amendment to the rules!
The Karnataka Government has proposed some changes in the Karnataka Shops and Commercial Establishments Rules, 1963, and by virtue of powers conferred by section 40 of the Karnataka Shops and Commercial Establishment Act, 1961 (Karnataka Act 8 of 1962) and as required by sub-section (4) of section 40 of the said Act, they have published information of all persons likely to be affected thereby and notice has been given for consideration of these amendments after the expiry of thirty days from the date of its publication in the official Gazette.
Original publication: 2025-10-07
Karnataka proposes relief under Shops Act via draft amendment to the Rules
The draft Karnataka Shops & Commercial Establishments (Amendment) Rules, 2025 aims to ease compliance for micro employers by exempting units with fewer than 10 employees from Rule 24, subject to Gazette finalisation.
Key Highlights of the Draft
New proviso: Compliance under Rule 24 is not required where an employer has less than 10 employees.
Significant compliance reduction for micro units—small retail, local services, start-ups—while larger units remain unchanged.
Comes into force upon final notification—anticipated October 2025, post consideration of objections/suggestions.
Expected Impact
| Stakeholder | Impact Summary |
|---|---|
| Micro Enterprises ( | Reduced paperwork & routine filings; lower compliance costs. |
| Labour Inspectors | Clearer segmentation—focus on higher-risk/larger establishments. |
| Large Employers (≥10 employees) | No change—Rule 24 continues to apply as before. |
| Start-ups/Local Services | Early-stage compliance relief supports formalisation and hiring. |
Why the Sudden Push to Reduce Compliance Burden?
In parallel with DPIIT’s moves on decriminalising minor offences, the Centre is fast-tracking compliance reduction to improve ease of doing business. The proposed Jan Vishwas (Amendment of Provisions) Bill, 2025 targets amendments across multiple Central laws to streamline regulatory requirements.
State-level Shops & Establishments updates often dovetail with this central agenda.
Action Points for Employers
- Verify current headcount (including contract/part-time) to assess Rule 24 applicability.
- If eligible (
- Maintain essential records & employee safeguards even where Rule 24 relief applies.
- Track Gazette notifications for final text, date of effect, and any conditions.
Karma Global – Shops & Establishments Compliance (Pan-India)
Karma Management manages end-to-end regulatory obligations under State S&E Acts—registration/renewals, registers & returns, policy drafting, inspection readiness, and ongoing advisory.
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