Investing in restaurants is one of the most popular investment options in India. The combination of excellent food and ambiance can attract a large number of customers and therefore maximize profit.
In India, however, you will have to secure certain licenses to open your restaurant. It will also take a considerable time for you to get the correct licenses required to open a restaurant. Things might get complicated if you do not understand the legal procedures for obtaining a License.
Here is a list of licenses that are needed to start a restaurant in India:
A unique 14-digit registration number is given that should be necessarily printed on food packages. The FSSAI license ensures customers that the food meets all safety standards. And is one of the most important licenses needed to start a restaurant in India. To apply you can visit the FSSAI website and fill up the registration form. All necessary procedures are mentioned on their website.
2. Restaurant Insurance
Despite the fact that there are no general rules for getting restaurant insurance, you should ensure your restaurant is based on the following parameters.
- Public Liability
- Product Liability
- Fire Policy
- Building & Asset
Legally registered entities can offer Restaurant insurance.
3. Health/Trade License
A permit from the Department of Health ensures that your restaurant follows all health regulations. The forms are available on the State’s Municipal Corporation website.
4. Eating House License
This License is mandatory for restaurants since any outlet which provides food and beverages should have this permit. This License is provided by the Licensing Police Commissioner of the city where your restaurant is situated.
5. Shop and Establishment Act/ License
To run a food business The Shop and Establishment License is important. The form is available on your respective State Government website.
6. GST registration
It is mandatory for companies including restaurants to be registered for GST by the Indian Government if the turnover exceeds 20 Lakhs. Generally, restaurants with a turnover below this threshold are exempt from GST registration, though they may voluntarily join the program.
7. Fire Department / Fire Safety License
Restaurants must strive to protect their customers from all danger, whether food products or fire hazards. A No Objection Certificate (NOC), ensures all safety from external and internal hazards, which is checked by the officials of the Fire Department.
8. Signage License
You want your legal papers to be intact for your business to run smoothly. But if you want to advertise your restaurant or sell it, you need a legal License for it. This License is called a Signage License. City Corporations and Municipal Committees can issue this license to restaurants.
9. Certificate of Environmental Clearance
A restaurant should not only keep the safety of the customers and health in mind, but it should also contribute to the safety and cleanliness of the environment. Because of this, restaurants are expected to obtain a Certificate of Environmental Clearance.
10. Professional Tax
Every individual’s income is subject to the municipality’s professional tax. Each state has a different tax rate. An enrolment number, as well as an identification card, are usually issued by states as a reference for remitting the skilled tax. This number can also serve as a guide for remitting the tax.
11. Provident Fund Registration
Employee provident fund is mandatory for the restaurant business if the restaurants have more than 10 employees. Additionally, employees earning less than Rs. 15000 per month must be covered by a provident fund at work.
12. Liquor License
Obtaining a Liquor License is mandatory if you want to serve drinks in your restaurant. If you fail to get a License, you can incur a huge penalty and the restaurant can shut down. A liquor license can be obtained from the Local Excise Commissioner, for which the forms are available at the respective State Government websites.
13. Music License
Those who play pre-recorded music in a non-private, commercial, or non-commercial establishment are required to obtain a music license issued by Phonographic Performance Limited (PPL). If a restaurant plays music without a license, they will have to face legal penalties.
14. Lift Clearance
Restaurants located in multi-story buildings with lifts must have lift licenses in order to operate safely. A permit needs to be obtained from the city’s Labour Commissioner, as well as the electricity department inspector.
Also, read – 10 Food Business Ideas in India [With Low Investment]
Frequently Asked Questions:
1) How can I get a food license in India for a restaurant?
To obtain the food license, you have to log in to the FSSAI website and then complete the registration process with all the relevant documents (mentioned on the website). Within 15 days, you have to submit a printout of the filled-up application form along with the documents to the Regional/State Authority.
2) Do I need permission to open a restaurant?
Yes, you need permission in order to run your restaurant smoothly and legally. For various requirements, there are different licenses that are needed to carry on your business.
3) Do you need a license to sell food in India?
Yes, you need a FSSAI license to sell food in India. In fact, FSSAI license is mandatory to do manufacturing, trading, distribution and transportation of food.
4) How much does it cost to start a restaurant in India?
Starting your own restaurant in India can cost anywhere between Rs 5 lakh to even Rs 1 crore. The overall cost depends on the size of the restaurant, its location, food cuisine, staff and kitchen equipment. Purchasing the land makes it more costlier in the beginning while the rent has to be given every month.
So these are all the licenses that are required to start your very own restaurant in India. Also, don’t forget that laws and regulations are not the same for every city and state. Getting all these permits is mandatory to run your restaurant smoothly without any hiccups. Once all is done, you are good to go.
We can’t think of a restaurant business without a Point of Sale (POS) system nowadays. If you are searching for an ideal POS system for your restaurant, then try IVEPOS POS software. IVEPOS is an all-in-one, point-of-sale and management platform for businesses in the food service and retail space.
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