All you need to know about Licenses and Registrations for Restaurant in India

Food Business in India is one of the most profitable and prevalent businesses these days. There are various restaurant licenses India required. In this digital age, anyone can order food anywhere, anytime. People are having fun with their meals at the doorstep using online food websites. Online food delivery has evolved very much in the past years which has also forced the food industry to develop with it. This is how the food industry has enjoyed massive growth in the past 2-3 years with the introduction of several new food joints. But before beginning a food business, it is necessary to follow a set of rules and regulations in order to carry out food services and sell food products. If you fail to do so, you may land up with unnecessary legal problems. Whether you are looking to open a food business or have a desire to know how to get a restaurant license in India, this article will guide you on the right path for running your food business smoothly. Let’s take a look at the food business license necessities to avoid future problems.

Food licenses required for restaurant in India:

Every food business owner, even if it’s a petty vendor/ hawker, has to get a Food license from FSSAI. FSSAI is the full form is named as Food Safety and Standards Authority of India. The FSSAI license is of 3 types:

1. FSSAI Registration
2. FSSAI State License
3. FSSAI Central License

Application for FSSAI Registration / License can be submitted through both offline and online methods. To get the license offline, the food business owner must send an application to the Licensing Authority along with the necessary fees. Though, for online license/ registration, the Food Licensing and Registration System (FLRS), portal made by FSSAI can be utilized. After completing the registration process, an FSSAI license number is given to the food business operator. If the food business is running in more than one state a central license will be required for the head office / registered office. The license is provided with varying validity from 1 year to 5 years. Heavy penalties are imposed on business owners operating a food business without FSSAI Registration/License.

Trade License/ Eating House License

The food business is generally given Trade License as an ‘Eating House’ under the Municipal Corporation laws of the relevant States in India. Any food business owner can get a trade license by submitting an application to the relevant municipality. Usually, the trade licenses granted in most of the States are valid for a period of 1 year and the same is renewed on payment of yearly fees. If you want to different outlets, every outlet must have a valid trade license from the relevant municipality.

Liquor License

If you are planning to serve alcohol along with the food, you will also need a liquor license. Selling alcohol or distributing it without a valid liquor license is not allowed by law and is forbidden. You can go to the State excise department to get approval to sell and distribute alcohol. There are various different types of Alcohol Licenses, it varies based on whether you are a Star hotel, bar/ pub, selling imported liquor or foreign brand, or Indian Made Foreign Liquor. To obtain the license, you will need identification, proof of address, a letter of authorization from the fire department, a letter of authorization from the municipal corporation, and any other documentation that the State Department can need.

Fire Department NOC

The safety from fire laws of most of the States in India thinks of the business of restaurants/ cafes/ hotels/ bakery as a hazardous activity that needs a “No objection Certificate” that too get from the Chief Fire Officer before commencing the business. To get a fire license, you will have to send the fire department your building plans, model of the building and certificate from the Architect, and also answer a set of questions related to compliance with fire safety laws.

Shops and Establishment Registration

Every operator of a shop or commercial building, that has more than 10 employees, must have a shop and establishment registration from the relevant State Labour Department. This procedure can now be followed online. This registration is usually valid for 5 years and after that it has to be renewed. Currently, some of the States are distributing Shops and Establishment Registrations, with lifetime validity after the payment of renewal fees.

Prevention of Food and Adulteration (PFA) Act, 1954

Food standards, general processes for sampling, analysis of food, powers of authorized officers, size of penalties and other parameters related to food, all fall under the Prevention of Food Adulteration (PFA) Act. It safeguards India against dirty, unsafe, and fraudulently labeled foods.

Pollution clearance

The food industry is thought of as a polluting industry due to the smoke emissions from the cooking procedure and washings of food waste. Due to that, your food business will require a pollution license/ Certificate or consent to start your business and consent to operate from the State Pollution Control Board. The category under which you will require a license will be based on the type and scale of operations of your business. You can see the following category-wise separation provided by the Central Pollution Control Board for hotels/restaurants.

• Hotels (Large Sized) – Red Category
• Medium Sized Hotels – Orange Category
• Non-alcoholic Beverages (Soft drinks) – Orange Category
• Small Bakery/Confectionery – Green Category
• Small Hotels – Green Category

Music License

If you want to play some pre-recorded music in your café/ restaurant/ hotel along with the Food you serve, you need to get a public performance license provided by Phonographic Performance Limited to prevent any copyright infringement cases. This license is made to protect the desires of the artists who make the music or compose the lyrics and the owners of such creative/ artistic creations. Usually, the public performance license is valid for 1 year.

Lift Clearance

If you have a lift in your restaurant you will need to get permission from the inspector of the electricity department and the labor commissioner of that particular city. This license is provided by the Electrical Inspector from the labor commissioner office after auditing the installation of the lift, layout, safety gears, etc.

Signage License

You must have marketing strategies for your product to ensure that your business earns great profits. Though, if you want to use marketing strategies for your restaurant either through word of mouth, pictures, logos, symbols, posters, etc. you need to obtain legal permission which is the signage license. You can obtain this license from local civil authorities like the Municipalities of that specific city.

Tax registrations:

Income Tax Registrations and Fillings

All the businesses, including the food industry, must have a PAN and TAN in the name of the business or in the name of the owner ( in case of a Sole-Proprietorship) in whose name the transactions are to be carried out. PAN and TAN are two ten-digit different alphanumeric numbers provided by the IT Department. Every person who deducts or collects tax at the source has to get a TAN. According to the recent changes, AADHAR can be used instead of PAN for filing IT Returns but PAN is still necessary when it comes to making payments that are more than Rs 50,000.

GST (Goods and Service Tax) Registrations

The VAT and Service Tax were removed after the introduction of GST on 1 July 2017. After the introduction of GST, tax is payable if the turnover of Rs.20 lakhs (Rs. 10 lakhs for North Eastern states & Special Category States) is earned. Every business that is liable to pay GST must register and get a GSTIN – a unique Goods and Services Tax Identification Number (GSTIN).

Professional Tax

Professional Tax is imposed by the local municipal corporation on the salary paid to every person. The tax rate is different in every state. For the remittance of the professional tax, most States provide a registration certificate or an enrolment number, which will be used as a reference for the payment of the tax.

Labour law Registrations

There are more than 20 labor law legislation that are prevalent in India. A unified code of wages and a code of social security has been created by the Government of India to unite the central labor laws. The other state-specific laws are still imposed over any entity doing business in the relevant state. Some important labor laws which have registration necessities are as under: Employees State Insurance registration is must be gotten by all entities, including food businesses (excluding Factories) in ESI notified areas, having more than 10 employees. Employees that earn less than Rs 21,000 per month are included under this scheme. Any entity that is exempted from getting ESI registration must obtain an Exemption Certificate. Employees Provident Fund registration is essential for food businesses having 20 or more persons (10 persons in some states in India). In such scenarios, employees with monthly income under Rs 15,000 will be necessarily covered under EPF. Contract Labour Registration will be imposed if you employ more than 20 workers under a contract. They are known as contract laborers. Generally, such workers are employed from a manpower supply company for working as waiters/ servers/ housekeeping and security individuals. In case you employ this model for employing for your business, you will need registration as a Principal Employer to these contract laborers.

Certificate of Environmental Clearance (CEC)

This certificate is from the EMA for specific types of projects or activities. You can acquire it from the Ministry of Environment and Forests after answering the set of questions for environmental appraisal.

Infrastructure Licenses

Including the licenses mentioned above, you will require other licenses which are not specific to the food business but may be imposed on you based on the infrastructure you invest in for your business. Such as, if you own a Diesel generator with a capacity above 500 KVA, you will need a Genset registration from the Electrical Inspector. Food Businesses that need to store Diesel, Kerosene, Liquid Petroleum Gas (LPG), Boilers, etc., may require a license from PESO if the aggregate of such flammable materials is more than the prescribed threshold.

Insurance

In the modern age, only some businesses exist without getting the necessary insurances, as not getting insurances could result in massive losses, something which the owner or the business may never recover from. A restaurant business needs insurance for public liability, product liability, fire policy, and some other policies for building and assets.

Gumastha License

If you want to start any business in the state of Maharashtra, you must get a Gumastha license. To acquire it, you need to have the following documents -

• PAN number as an ID proof
• A proof related to address or a no-objection certificate from the landlord
• Application letter in the given format by the Municipal Corporation of Greater Mumbai
• Permission Letter for Business
• Fees as prescribed by the government for a partnership Firm
• Memorandum and Article Of Association (MoA and AoA)
• Certificate Of the incorporation of the Company
• Director’s ID and Address proof

These are the necessary licenses that will legally allow you to carry on with your restaurant business in India without getting stuck in any kind of legal drama. Restaurants are one of the brightest start-up ideas that you can ever think of. However, running a hotel or a restaurant can be equally difficult as it is directly attached to the health and safety of consumers. If you manage to fulfill the legal necessities, then your business will strengthen its market standing, and also you will stay away from all legal drama. This article gave you the basic legal requirements to start a food business in India. But still, before taking up any legal actions, we want you to take proper consultation from corporate and legal experts. Legal formalities may seem like a lot, especially when you are starting a company or a bigger firm, but as you deal with all the necessary formalities first, you won’t have to worry about them later and you won’t have to pay any penalties either. Conclusion This blog has given you the basic legal license or registration to start a food business in India. Though still, before taking up any legal actions, we recommend you to take a proper consultation form ca legal experts like us. order to acquire an FSSAI food license, log in to your account and grasp the general procedure given on the website. Finding the process to register FBO online too slow? Take the professional help of LegalRaasta, one of the top food consultants over the country for swift, registration of your food business for any kind of FSSAI registration. Call +91-8750008585 to get started! You can mail us at [email protected]