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What is Gumasta License

What is Gumasta License?

Gumasta License is a registration required for doing any kind of business in the state of Maharashtra. It is governed by the Municipal Corporation of Mumbai under the Maharashtra Shops and Establishment Act. This is a certificate which provides you the authority to do your business at a particular place. This license is a basic requirement for any business to be recognized by Government or Bank for all business irrespective of whether it is done by a single person or big organization.

Obtaining Gumasta ensures your business can be developed without many complications and it is very important for opening a current account or obtaining any loan from the bank. Without this license in the Maharashtra State, obtaining GST registration is not possible.


Main article: British East India Company

In the 18th century, the East India Company had established itself in India. Indian cotton and silk fabrics were in great demand worldwide and hence were of special interest to them. It proceeded to develop a system of management and control that would eliminate competition, control costs, and ensure regular supplies of cotton and silk goods. Given the small number of Englishmen, and their unfamiliarity with the local language and society, the Company turned to local intermediaries, and gave them legal authority to enforce contracts. The Company tried to eliminate the existing traders and brokers connected with the cloth trade, and establish a more direct control over the weaver. For this purpose they appointed paid servants called the gumasta were employed who would obtain goods and from local weavers and fix their prices. The prices fixed were 15 per cent lower than market price and in extreme cases, even 40 per cent lower than the market price. They would also supervise weavers, collect supplies, and examine the quality of cloth. They also prevented Company weavers from dealing with other buyers.

Style of working

The Company’s agents who had the right to enforce contracts could well use the same coercive power to extort rents from the weavers. Such opportunism seems to have been common even late into the textile venture. In case, weavers refused signing contracts they were subjected to torture and even awarded imprisonment. In this way the gumasta were useful in obtaining goods at a low price for the Company which made huge profits from their exports.

The eighteenth century marked the gradual dissolution of the Mughal Empire in India and the establishment of British rule, initially under the auspices of the East India Company. The company, in search of quick profits, assumed control of Bengal’s lucrative textile industry, which produced one - third of all cotton textiles used in Europe at the time. It appointed its own network of much - hated middlemen, the most important of whom were called gumasta, under the agency system of 1753. In the words of a former company employee, " . . . [the gomastha ] makes [the weavers] sign a bond for the delivery of a certain quantity of goods, at a certain time and price, and pays them part of the money in advance. The assent of the poor weavers is in general not deemed necessary . . . . Rights to the production of individual weavers were freely traded among the gumasta as if their clients were slaves. Those who refused to participate in the system were flogged, and on occasion killed. The prices the weavers received were, by one estimate, 20 to 40 percent less than they could have gotten in the marketplace.

–passage from, Nobel Peace Prize awardee and economist Muhammad Yunus's From Vanderbilt to Chittagong

The Company's Board of Trade records from 1793, 1815, and 1818, state that "as a rule the Company’s gumasta and other inferior servants extracted perquisites from the weavers, and not infrequently they were whipped or beaten with rattans [canes]." There were various kinds of "perquisites." One such was an extra charge: this might be a commission (dasturi), tribute (salami), or simply "expenses" (kharcha). Another was a deduction of a portion of the capital advance. Yet another was using debased currency to pay the weaver. The gumasta and his appraisers, sometimes in collusion with Company officials, would falsely appraise cloth quality. They would charge the Company for High Quality, but pay the weaver for low quality. The gumasta profound knowledge about a particular area and their negotiating ability with local smaller merchants would be indispensable to firms.

Categories of Gumasta License

  • Retail or wholesale shops.
  • Premises from where services are provided to customers.
  • Store-rooms, godowns, and warehouses.
  • Any other place of work.
  • Residential hotels.
  • Restaurants or eating houses.
  • Any Public amusement place/entertainment/theater

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