Punjab Mandi Licence: The ₹100 vs ₹2,000 Confusion, and What to Actually Ask the Board
Short answer: in Punjab the licensing authority is the Secretary of the Punjab Mandi Board or an officer he authorises in writing, under Section 6 of the Punjab Agricultural Produce Markets Act. The fee is where it gets confusing: Rule 17 specifies ₹2,000 per year on Form AA with a bank guarantee, while Section 10 of the Act caps the prescribed fee at ₹100. Both appear in current sources. You must confirm the figure with the Board before paying.
Why the two numbers both exist
This is the part no one explains, and it is why searching for the Punjab licence fee produces contradictory answers:
- Section 10 of the Act, in its original form, permits a licence to be granted "on payment of such fees not exceeding one hundred rupees as may be prescribed". That is a statutory ceiling of ₹100.
- An older version of the General Rules routed the application through the local committee on Form A, in duplicate, with a cash security and a bank guarantee, and set a three-year licence fee of ₹100.
- A newer Rule 17 says a dealer seeking a licence under Section 10(1-A) applies on Form AA directly to the Secretary of the Board and deposits a licence fee of ₹2,000 per year or any part thereof, along with a bank guarantee.
The ₹2,000 figure appears to come from later amendments that added sub-section (1-A) alongside the original Section 10. In practice that means which fee applies depends on which sub-section your licence is granted under, and that is a question only the Board or your Market Committee can answer for your case.
Do not assume the lower figure because you read it first. Ask which sub-section and which rule, and get the notification number.
Who needs one — and who does not
The Act's definition of "licensee" expressly covers people licensed as Kacha Arhtia or commission agents. If you handle another person's produce for commission in a notified market area, you are in scope.
There is one clear exemption worth knowing: a licence is not required by a producer who sells his own agricultural produce, either himself or through a bona-fide agent — provided that agent is not a commission agent. A farmer selling his own crop does not need a trader licence. The moment a commission agent is involved, the agent needs one.
Where the application goes
The two routes differ, which matters if you are handed the wrong form:
| Form A (older route) | Form AA (Rule 17 / s.10(1-A)) | |
|---|---|---|
| Submitted to | Secretary of the Board, through the committee of the area | Secretary of the Board, directly |
| Copies | In duplicate | As prescribed |
| Fee stated | ₹100 for three years | ₹2,000 per year or part thereof |
| Security | Cash security and bank guarantee | Bank guarantee |
Source: the Punjab Agricultural Produce Markets (General) Rules, 1962, and the Act itself, both hosted on the Punjab Mandi Board site.
A search trap worth knowing about
Searching for "Punjab Market Committee Regulations" returns a 2020 document that looks authoritative and is not Indian law — it belongs to Pakistan's Punjab. The two provinces share a name, a language and much of the same mandi vocabulary, so the documents read plausibly to an Indian trader.
Before relying on anything you find, check the domain. Indian Punjab's material sits on mandiboard.nic.in and indiacode.nic.in. If you are reading a .pk domain, you are reading the wrong country's rules.
The licence is separate from the levy
Punjab's levy stack is among the heaviest in India — roughly 3% market fee plus 3% rural development fee, which with around 2.5% arhtiya commission produces the widely-cited ~8.5% all-in figure on wheat and paddy. That is charged on the value you trade and has nothing to do with the licence fee.
See our Punjab mandi fees and J-Form guide for the levy side and the J-Form, and the state-by-state comparison for how Punjab sits against the rest.
What to ask the Board
- Under which sub-section of Section 10 will my licence be granted — (1) or (1-A)?
- Which form does that require, A or AA, and does it go through the committee or directly to the Secretary?
- What is the current fee under that route, and under which notification?
- What bank guarantee and cash security are required, and in what amounts?
- What is the licence period, and what is the last date to renew without penalty?
Get the notification number for the fee. It is the only way to know whether the figure you were quoted is current, and it is what you produce if the amount is later disputed.
Licensing in other states
Fees and forms are set state by state and the spread is extreme — ₹60 a year for a commission agent in Haryana, ₹10 per annum in Assam, ₹10,000 on Telangana's own form, and ₹2,00,000 for a multi-market licence in Madhya Pradesh. For the comparison and renewal rules, see mandi licence in India.
Corrections
We have flagged the fee conflict above rather than picking a number, because a trader who pays the wrong amount loses time and possibly the application. If you have confirmed the current figure with the Punjab Mandi Board, email support@mandigrow.com with the notification reference and we will update this page and credit the correction.
Frequently Asked Questions
How much does a mandi licence cost in Punjab?
Punjab’s own sources give two different figures. Rule 17 of the General Rules specifies ₹2,000 per year or part thereof on Form AA for a licence under Section 10(1-A), with a bank guarantee. Section 10 of the Act in its original form caps the prescribed fee at ₹100, and an older version of the Rules set ₹100 for a three-year licence on Form A. Which applies depends on the sub-section your licence is granted under, so confirm with the Punjab Mandi Board before paying.
Who issues the mandi licence in Punjab?
The Secretary of the Punjab Mandi Board, or any other officer authorised by him in writing, is the authority for granting licences required under Section 6 of the Punjab Agricultural Produce Markets Act. Depending on the route, the application goes either directly to the Secretary on Form AA, or through the committee of the area on Form A.
Does a farmer need a mandi licence in Punjab?
No. A licence is not required by a producer who sells his own agricultural produce, either himself or through a bona-fide agent, provided that agent is not a commission agent. The exemption covers the producer. Once a commission agent handles the sale, the agent needs a licence.
What is the difference between Form A and Form AA in Punjab?
Form A is the older route — submitted in duplicate to the Secretary of the Board through the committee of the area where you will trade, with a cash security and bank guarantee, and a stated fee of ₹100 for three years. Form AA is used for a licence under Section 10(1-A), submitted directly to the Secretary of the Board with a bank guarantee and a stated fee of ₹2,000 per year or part thereof.
Why do Punjab mandi licence fees differ between sources?
Because the Act and the Rules were amended at different times and both texts remain in circulation. Section 10 originally capped the prescribed fee at ₹100; a later sub-section 10(1-A) with Rule 17 introduced a ₹2,000 annual fee on Form AA. Neither source is wrong — they govern different routes. Ask the Board which sub-section applies to you and get the notification number.
Are the Punjab Market Committee Regulations 2020 applicable in India?
No. That document belongs to Pakistan’s Punjab, not India’s. The two provinces share a name and much of the same mandi vocabulary, so the text reads plausibly to an Indian trader. Indian Punjab’s Act and Rules are hosted on mandiboard.nic.in and indiacode.nic.in — check the domain before relying on anything you find.
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