Are you planning to open a restaurant in India? But you don’t know where & how to proceed? In this write-up, you would come across mandatory licenses required to open a restaurant in India. Once you get accustomed to such a requirement, it would become easier for you to set up a legally viable restaurant in India. Please note that the number of registrations needed to established a restaurant may vary state-wise.
Mandatory Licenses are Required to Open a Restaurant in India
Following are the list of fundamental legal permits that one has to secure to open a restaurant in India;
FSSAI license is one to the basic licenses required to open a restaurant in India. FSSAI is an apex government institution that keeps the tab on the activities performed by FBOs in India. In license granted by this institution serves as legal consent for the food businesses, including restaurant owners. FSSAI approved restaurants garner better recognition as compared to non-registered ones. Customers in the present scenario prefer dining out at places that have proper legal permissions, including a Food license.
An Overview on the Type of FSSAI License
FSSAI licenses are categorized into three fundamental categories, based on the turnover generated by a restaurant per year.
Followings are the mandatory licenses granted by FSSAI to FBOs in Indi:
FSSAI Registration – For FBOs earning less than INR 12 lakhs revenue/year
State License – For FBOs generating turnover greater than ₹12 lakhs and less than 20 crores. The cost for obtaining this license has been capped at Rs 2000/year.
Central License – For FBOs earning more than 20 crores of yearly revenue. The cost of securing this license has been capped at INR 7500/year.
The typical validity duration offered by the FSSAI license ranges from 1 to 5 years.
Read our article:How to Get FSSAI License in India: Full Guide
How to apply for an applicable FSSAI license?
c. After the submission of an e-form and application fee, the same shall undergo an extensive verification process conducted by the FSSAI’s officials. The applicant is required to upload a soft copy of the following documents during the application filing.
Documents required for FSSAI license
- Valid Email ID and Contact Number
- Identity and Address Proof granted by a Government Authority
FSSAI form duly filled & signed by the Restaurant Owner
- List of main stakeholders along with their identi
- fication proof
- Proof of possession of the location/premise
Declaration of Food Safety Management plan
- No objection certificate (Noc) from the local Municipal Corporations or local bodies
- Kitchen Layout Plan
- Water Testing Report provided by ISI certified organization
- List of Food Category
- Partnership Deed/ Affidavit of Proprietorship (in case of business operated in other
- premises or case of partnership firm)
- Medical certificates of employees
- Types of equipment to be used
It might look tedious but if the documents are uploaded aptly the license request will be processed promptly without any issues.
Eating House License
Eating house license serves as mandatory legal consent for any restaurant intending to open a public eatery where foods, as well as beverages, are served to the customers. If you are intending to set up an Eating house you must apply for the same under the state or city headquarters.
Typical documents needed to secure Eating House License in India
- NOC granted by Fire Department (If the seating capacity is more than 50)
- Detailed site plan along with the photographs
- Documents of the restaurant and NOC from the owner
- Trade license
- FSSAI license
- Photocopy of legit MCD/ NDMC/DCB/ Airport Authority of Indian
- Copy of trade license and valid fee receipt
- Undertaking pertaining to the installation of the CCTV camera recording units with 30 day’s recording stored
How to get eating house license?
The eating house license can be secured from the official portal of the city or state licensing policing commissioner.
Applicants have to create an account on this portal and proceed with the relevant application process. During the application process, the portal will prompt the applicant to upload the mandatory documentation for verification purposes.
The cost of securing an eating house license is not as significant as fssai registration. All applicant is required to make a payment of Rs 300 as a fee for securing this license.
Health trade license is one of the imperative licenses required to open a restaurant in India. In India, to operate an establishment that deals is goods & services that affect the health of masses at large; the GOI mandates the securing of health license. Essentially there health trade licenses are available under two important heads:
- Health Care License
- Health Trade license
Fundamental documents required for obtaining a health trade license in India
- Three copies of the floor plan
- Copy of utility bills
- NOC from landlord and rent agreement
- Sewer Connection Proof
- Proof regarding Property Tax
- NOC from local police
- Layout plan of the restaurant
- Indemnity bond for Rs.100
- Certificate of Structural Stability attested by the Structural Engineer
- Water testing certificate granted by the certified lab.
- Medical Certificates of Employees
- Lal Dora Certificate ( for Delhi region)
How to apply for a Health Trade license?
You can secure a health trade license from the State’s Municipal Corporation against a duly filed e-form and standard fees. The application for the same can be filed on the Municipal Corporation portal. If any Restaurant owner opts to run his/her Restaurant with a Health trade license then heavy penalties would be imposed on the owner as per the norms of Municipal Corporation.
Serving liquor to the customer without a liquor license is an offense in the eye of the law. Obtaining a liquor license is a tedious and complex undertaking. The license for it can be secured from the local exercise commissioner and the relevant applications are available with the state government portal.
An Overview on types of liquor license available in the present time;
- L-1 license – L-1 license is mandatory for the wholesale supply of Indian-made liquor to other license holders.
- L-3 license: It is mandatory for hotels that serve foreign liquor to the guests
- L-5 license: L-5 license is a mandate for hotels that offers liquor in their in-house bar
- L-19 license: L-19 license is compulsory for registered clubs that treat their members with foreign liquor
- L-49A license: L-49A license is required for offering liquor at parties or marriages organized in the Delhi region.
- Tavern License: Tavern License is a legal mandate for those entities generating 50 percent of their profit via the sale of alcohol.
- Beer & Wine License: Beer & Wine License enables the restaurants and bars owner to sell beverages contain moderate alcohols such as beer and wines.
- Restaurant License: Establishments that generate less than 40 percent of their profits from the sale of alcohol should obtain this license from the relevant authority.
- Personal Bar license: Personal Bar license enables individuals to trade alcohol on behalf of a licensed business.
Documents required for LIQUOR license
- Restaurant’s addresses proof
- Address proof of the restaurant
- A true copy of the application and business details
- No Objection certificate accorded by the Fire department
- NOC from the municipal corporation
- List of active directors managing the company
- MOA & AOA (if the applicant is a OPC, private limited company or Public limited company)
- Copy of the recently filed IT returns
- Applicant photos
- Affidavit declaring non-criminal record of the applicant
Any business including eating houses and restaurants with over Rs 20 lakhs of annual turnover is mandated to register under GST.
Rates of GST for restaurant business
- Standalone restaurants with Air conditioners attract 5 percent of GST
- Hotels having in-house restaurants and charging over Rs 7500 per room are subject to the GST rate of 18%
GST registration can be secured from the GST portal against the online application that seeks the following details:
- Applicant details
- Contact number and Email ID
- PAN card
- Proof regarding the Business place
- Copy of lease or rental agreement
- Legitimate bank account
- Provisional ID as well as password secured from the VAT department of the respective state
Environmental clearance license
Restaurants are legally obligated to take required measures for protecting environments, thus, it is vital to secure an environmental clearance license (CEC). This license can be obtained from the Ministry of Environment and Forests after furnishing the questionnaire regarding the environmental appraisal.
Fire safety license
All restaurants are legally bound to protect the interest of the end-users in all cases. In this purview, they are mandated to comply with fire safety guidelines. The Fire NOC can be secured from the Fire Department portal of the respective state after submitting a prescribed application. Officials of the Fire Department shall grant the license after in-depth verification of documents and on-site inspection of the premises.
Lift license is a legal mandate for establishments including the restaurant which are situated in multi-story buildings. For this, restaurant owners have to secure the Lift Clearance License to ensure that the lift operations meet the safety provisions. One can obtain a lift clearance license from the Electrical Inspectorate working in the labor department.
If you are intending to promote your restaurant business via the use of words, pictures, & symbols then you will need legal consent known as a Signage license. Restaurants can secure this license from the Municipal Committee of the respective state.
If you are intending to entertain your customers with music and videos in your restaurant, then you would require securing legal permission in the form of a Music license. You can obtain this license from the Indian Performing Rights Society through submission of the prescribed application.
Shop and establishment license
Shop and Establishment license is another important legality for commercial establishments in India. As per the Shop & Establishment Act, every commercial establishment including a restaurant in India are liable to obtain this license. Shop & Establishment license is granted by the Department of Labour of the respective state.
Shop and Establishment Act governs the following aspects of the commercial establishments:
- opening and closing hours,
- paid leaves,
- working hours of employees
- Hygiene requirement
Although there is no liability on the business owner to obtain insurance for their Restaurant, you must opt for the same on the below four parameters.
- Public Liability
- Product Liability
- Fire Policy
- Building & Asset
- Insurances for a restaurant can be secured from any registered insurance company
Do not be overwhelmed by the string of permits required for hassle-free operations. If you have the requested documents at your back up you won’t necessarily face any issue in obtaining these licenses. So, this is the complete briefing on the mandatory licenses required to open a restaurant in India. If you need any sort of advice on the same, feel free to avail CorpBiz services.
Read our article:Procedure for Getting Online FSSAI Central License in India