Warehouses are storage areas/units used to store commercial goods. A Warehouse Licence can only be obtained through an authorised Government Agency.
Depending on the type of business, where you're doing business and other specific regulations that may apply to get a Warehouse Licence In India.
There may be multiple government agencies that you must contact in order to get a Warehouse Licence.
What is the Warehouse Registration/Licence rule?
According to the WDRA, 2007 and the Warehousing (Development & Regulation) Registration of Warehouse Rules, 2017, anyone starting or carrying on a warehousing business and intended to publish Negotiable Warehouse Receipts (NWRs) must first register the warehouse with the WDRA and comply with all applicable warehouse legal requirements.
Types Of Warehouses in India
- Cooperative Warehouses
- Public Warehouses
- Private Warehouses
- Bonded Warehouses
- Government Warehouses
- Special Warehouses
1. Co-operative Warehouses
As the name suggests, these are the warehouses owned and run by co-operatives, where co-ops and non-co-ops can store their goods.
An important feature of these types of warehouses is that they usually store goods for a short period of time.
In the case of perishable items, send them within a day. They normally work on the non-profit framework.
2. Public Warehouses
These are owned by third parties and given on rent to companies or individuals.
Such warehouses have the facility of storage with the conditions required to store them in mind.
Meaning perishable items could last for days under frozen temperatures or non-humid conditions.
3. Private Warehouses
In contrast to public warehouses, private warehouses are owned by private individuals (big companies), not open to the general public.
Such warehouses involve expensive construction and maintenance; however, they are still a great option for huge companies looking for long-term storage and wanting to own them.
4. Bonded Warehouses
A bonded warehouse is a location where goods being imported into a new market are stored and processed.
Bonded warehouse goods are exempt from customs duties (a type of tax). Any applicable duties become payable when the goods are delivered to their final destination.
5. Government Warehouses
In such warehouses, the government (state or central) tends to have direct control as they are the owners of such warehousing facilities.
They provide better security and are generally a safer option for any individual to use.
6. Special Warehouses
Special warehouses are built for special storage purposes that normal warehouses may not be able to provide.
Some examples are hazardous warehouses where hazardous chemicals/substances may be stored.
Cold storage warehouses, for storing perishable items at low temperatures, archive warehouses for papers and files, and the like.
How to select which warehouse is best for You
Choosing a warehouse becomes of prime importance for companies because items, if not stored properly, tend to lose their value.
And, given that warehousing can actually be costly and vital, it becomes even more important to pick the right warehouse for your business.
Here are a few things one should always keep in mind before applying for Warehouse Licence In India or looking for the best warehouse:
1. Storage Needs- When choosing a warehouse, businesses should carefully consider all of their storage needs, including racked or bulk storage, adequate square footage, and the compatibility of the products being stored with one another. Because warehouses have varying specialities and capabilities, it is critical to determine which facility is best suited to one's business profile.
2. Location- The importance of location in positioning products close to customers for cost-effective and timely delivery cannot be overstated. Companies can choose the best warehouse location by calculating transportation costs to and from the warehouse, including final-mile distances to end customers.
3. Security- The warehouse must be fully equipped to handle those products if a company needs warehouse space for products that must meet strict safety and integrity standards, such as perishable food or hazardous materials. Warehouses, for example, should have alarms, secured entry, sprinklers, risk management processes, and the necessary credentials, people, and equipment.
4. Technical Requirements- Warehouses should be outfitted with EDI and software that allows for constant tracking of shipments in transit. Companies should also be able to track orders and inventory while integrating their ERP systems with the warehouse's existing software.
Legal Requirements For Warehouse Licence in India
To obtain a licence for a warehouse in India, one needs to apply to the Customs Department, and either the Principal Commissioner or the Commissioner of Customs needs to verify the application.
There are a few requirements for eligibility to obtain a warehouse licence:
1. The applicant needs to be a citizen of India or an entity registered to any law that is under force at the time.
2. An undertaking has to be submitted by the applicant to obtain a licence.
3. A solvency certificate is required, which in the case of a public warehouse is 2 crores and for a private warehouse is a sum specified by the Principal Commissioner or Commissioner of Customs.
4. For Special Warehouses, the proposal to store goods specified by the board is followed under the Special Warehouse Licensing Regulations, and the undertaking for the payment of services for the maintenance of the goods is also an additional requirement.
Documents Required for Warehouse Licence In India
1. Application in the appropriate form, including a photograph of the applicant/authorised representative.
2. Identity verification for online warehouse licence applications is stated in the Warehousing Act's Fifth Schedule (Development 2017 Warehouse Registration (and Regulation) Rules
3. Online warehouse registration in India for Standard Operating Procedures Document containing the given net worth in Warehousing Rule 18 (5). (Development 2017 Warehouse (and Regulation) Registration Rules.
4. Warehouse Registration Insurance Policies As defined, copies in Warehousing Rule 17 (Development 2017 Warehouse (and Regulation) Registration Rules
5. Online Warehouse Registration Warehouse Layout Plan (s)
6. India Online Warehouse Registration Warehouse (cold storage) Basic Data Sheet
7. Warehouse Registration Online Proof of the technical standards that were used to build the warehouse (cold storage)
8. India Online Warehouse Registration List of assaying equipment available in the warehouse
9. Warehouse Registration Online List of weighing equipment available at the warehouse
10. Fire safety precautions are in place at the warehouse
11. India Online Warehouse Registration In the appearance of a privately held warehouse: According to the Sixth Schedule of the Warehousing Act, a copy of the Records of Rights or a registered transfer document in respect of the property on which the warehouse is located is necessary (Development 2017 (and Regulation) Warehouse Registration Rules
12. Online Warehouse Registration Document proving the efficacy of management over the warehouse (according to the Warehousing (Development and Regulation) Registration of Warehouses Rules).
Who Gives Special Warehouse Licence In India
Special warehouses are regulated separately in India. Licensees operating warehouses under former sections 57 or 58 and storing goods for duty-free shops/ship stores/diplomatic stores must apply for a licence under section 58A.
If they intend to store such goods beyond the three-month transitional period.
The application must be submitted within one month of the 14th of May, 2016, under the Special Warehouse Licensing Regulation, 2016.
WDRA Warehouse Procedure for Registration
The WDRA has laid out a procedure for registration of Warehouse and is as given below:
1. Every Applicant wishing to 'Apply for New Registration' and Warehouseman wishing to 'Renew Registration' will be able to do so by logging in to the WDRA portal at https://www.wdra.gov.in and initiating 'Portal Registration' activity.
2. The applicant must enter their name, email address, and mobile phone number, as well as the password they have chosen.
3. After submitting the Application for Portal Registration, the applicant will receive a message confirming successful Portal registration.
Warehouse Registration under GST
GST registration for warehouses is more or less the same as the GST registration for any other business.
To operate a business in India, an individual must obtain GST registration due to the aggregate turnover criteria.
Inter-state supply of goods, or the business becoming liable to pay tax under the GST reverse charge mechanism.
Except for special category states, any person doing more than Rs.20 lakhs in a fiscal year should apply for GST registration.
The GST aggregate turnover threshold for special category states is Rs.10 lakhs.
According to the GST Act, every owner or operator of a warehouse, godown, or other place is used for goods storage.
As well as every transporter must keep records of the consignor, consignee, and other relevant details of the goods stored or transported.
It applies whether or not the individual has registered for GST. As a result, the godown, warehouse, or transport should register for GST by completing Form GST ENR-01.
After filing and verifying the GST registration through the application form, the portal will generate a unique enrolment number for the unregistered godown, warehouse, or transporter.
Warehouse Registration fees
The minimum fee for registering a warehouse is Rs 7500. However, there is a fee reduction for warehouse owners who are a farmer producer group or a cooperative society. They are charged Rs 5000 for a storehouse.
Warehouse Rules and Regulations
A few universal warehouse rules can be laid out to ensure quality service and benefits for both parties.
1. Equipment Safety- It is critical for the safety of your employees that they are trained in the use of equipment before they are allowed to use it. Employees should receive adequate training, and you should test their knowledge of equipment safety annually. Depending on your region's laws and safety requirements, particularly dangerous equipment may necessitate biannual or quarterly inspections.
2. Safety in Lifting- Employees should all be trained in proper lifting techniques and advised to avoid lifting items that are logically too large to be moved safely by one person. Lifting techniques can be taught in a workshop setting and should be reviewed annually to reduce the risk of employee injury.
3. Warehouse Management System- A warehouse management system, or WMS, is a software programme used to manage day-to-day operations. There are numerous WMS options available at various price points. Depending on the needs of your warehouse, you may be able to use a free WMS or inventory management system like ABC Inventory. More complex warehouse requirements necessitate more complex systems, so shop around to find the one that best suits your needs.
In which Case Licence of Warehouse can be Rejected
While the reasons for your Warehouse Licence In India getting rejected could stem from multiple reasons, here are a few common ones:
1. Incomplete Submission- Not providing full details as asked in your application may lead to your application getting rejected.
2. Lack of Safety- A common problem among new warehouses is failing to meet the standards as specified by the Principal Commissioner or Commissioner of Customs. Ensure your warehouse has every required safety measure.
3. Lack of Documents- Not filling out the right forms and publishing the right documents may also lead to the rejection of your form.
Basic Warehouse Information
The working of a warehouse is solely dependent on the following processes:
1. Receiving- The warehouse receives inbound shipments. The typical receiving procedure entails comparing the receipt to the vendor's packing list. The receipt is then entered into your inventory system using your purchase order number. This ensures that what was shipped to you was indeed ordered by you.
2. Putting Away- This is the procedure for storing the inventory you received. You will typically store items in fixed picking locations (the item is always stocked in the same location), more random locations (the item goes wherever there is room), or a combination of the two (you fill a fixed picking location, then put the rest in overflow storage).
3. Slotting- The process of deciding where each item will be stocked is known as slotting. Basic slotting entails placing your fastest-moving items in easily accessible locations and ensuring that the locations are the correct size.
4. Shipment- Orders must be prepared for shipment after they have been picked. This is known as order packing in parcel-shipping operations, whereas in truckload and less-than-truckload operations, it is simply known as shipping. The tasks involved here differ depending on the type of shipment. Choosing the appropriate carton size, using void fill or other methods to help protect the items being packed, sealing the carton, and applying the shipping label are the main steps for parcel shipments.
Warehouses essentially provide commodity storage of the types listed above.
Commodity warehouses are a cost-effective and risk-averse storage solution.
However, the nature and quality of storage vary depending on the type of warehouse and management practice. A few benefits of commodity storage are:
1. Intermediate Storage- Commodity storage can allow goods to be stored in the intermediate production stage, wherein the take and drop by companies can run smoothly.
2. Risk Management- Warehousing can be used to mitigate risk. Warehouses should ideally be designed to prevent and mitigate storage risks—for example, the warehouse structure and systems aid in regulating the internal environment for product quality.
3. Value Addition- A commodity warehouse is where commodities are sorted, graded, and packed. Because of the value addition, these activities raise the product's price.
Final Words on Warehouse Licence In India
Warehousing is a growing industry involving heavy work and safety regulations to ensure that trade flourishes in an economy.
These regulations put in place the process of obtaining a licence complex, from applying to furnishing to establishing and finally operating.
However, the processes explained here would have given you an idea of how exactly to go about it.