Opening a restaurant can be an overwhelming process. You need to choose a restaurant concept, the right location, hire quality staff, get licenses and market the restaurant just right.
Pause. We’re in this with you.
With the right rules & knowledge in hand, even getting a restaurant license can turn into a cakewalk. This post will help you navigate the legal processes and requirements of opening a restaurant.
Ready for some paperwork and patience?
Licenses required to run a restaurant in India
These are the most critical restaurant licenses required to open a restaurant, obtaining them will ensure that your restaurant operates legitimately.
1. FSSAI License
The FSSAI license, also known as the Food License is one of the most important licenses required to open a restaurant. It is obtained from the FSSAI (Food Safety and Standard Authority of India).
This restaurant license is not merely a license, on the contrary, it also serves as an approval by the authority and ensures the customers that the food of that particular restaurant affirms to the food safety standards of India. It is necessarily a unique 14 digit registration number that is given to manufacturers, traders, and restaurants. It is mandatory to print it on all food packages.
FSSAI License Cost
Here’s a detailed breakdown for different kinds of FSSAI licenses.
Documents Required for the FSSAI License
These are the documents needed to apply for the FSSAI Restaurant License:
- ID proof and Address proof
- Valid email id
- Phone number
- Declaration of Food Safety Management Plan
- Kitchen layout plan
- List of food categories
- Water testing report from ISI approved facility
- No Objection Certificate (NOC) from the owners or the partners
- Medical certificates of employees
How to get the FSSAI License for your Restaurant
Once you have these documents in place, you can apply for the license. The application process is rather simple:
- Log in to the FSSAI website, complete the sign-up process by creating a username for the registration.
- Then fill up the online application with all the required documents.
- Submit the printout of the filled-up online application form to the Regional/State Authority with all the supportive documents within 15 days from the date of making the online submission, to ensure that your application is considered.
Here is the complete guide that would help you in getting FSSAI License for your restaurant.
2. Liquor License
If your restaurant serves liquor, then procuring the Liquor License is a must. This can be obtained from the Local Excise Commissioner, and the forms are available at the respective State Government websites. Having this license is exceptionally crucial since if you sell liquor without the above-said license, you can incur a huge penalty and also be forced to shut down the premises permanently.
Liquor License Cost
You will have to pay Rs.5,000 at the time submission of the documents and an additional Rs.50,000 is required for each additional spirits brand, like whiskey, rum, gin, brandy, vodka and the like.
Documents Required for the Liquor License
Here’s the list of documents required for getting the Liquor License for a restaurant or bar:
- Documentary proof regarding the legal status of the restaurant or the hotel, that is, whether it is a company, partnership firm or any other type of setup.
- Proof for whether the restaurant or the hotel is in legal possession of the plot.
- A certificate that validates the completion of the restaurant or the hotel building.
- Trade License from the Local authority, that is, MCD/NDMC or such other authorities
- Certificate of registration of eating house license issued by the DCP.
- Documentary proof regarding applicant being an Income Tax Assessment and Sales Tax-Assessment.
- NOC from the state Fire Service
How to get the Liquor License for your Restaurant & Bar
- Go to your state government website to find the form.
- Documents mentioned above should be served to the concerned Excise Officer who inspects the restaurant or the hotel premises.
He will then submit a report to the liquor granting authority.
- After the approval, the applicant has to submit the fees as per the guidelines and then the license is issued.
It is a known fact that obtaining a liquor license for your restaurant is by far the most difficult one since the government verifies all the details with an eagle’s eye. So, best of luck.
3. Health/Trade License
This license ensures that your restaurant stands corrected under the health concerns of the Health Department. It will need around 60 days to be issued to you after your submission of the form and documents.
Health/Trade License Cost
The cost could range from Rs 500 to 50,000 depending on your state rules and specific requirments.
Documents Required for the Health/Trade License
- Ownership proof, Rent Agreement or NOC from landlord
- Three copies of the site plan and layout
- Indemnity bond for Rs.100
- Structural Stability Certificate signed by Structural Engineer
- Power and Water Bills
- Sewer Connection Proof
- Letter from Delhi police
- Water Testing Reports
- Plan of the Premises
- Medical Certificates of Employees
- Proof of Property Tax
- Lal Dora Certificate, if applicable
How to get the Health/Trade License for your Restaurant
A restaurateur can apply for Health/Trade License either at CSB or online. The forms are available at the State’s Municipal Corporation website or Zonal Citizen’s Service Bureaus. Municipal Corporations hold power to shut down restaurants which do not have this license.
4. Eating House License
The Eating House License is provided by the Licensing Police Commissioner of that city where you would want to open the outlet.
Eating House License Cost
The approximate cost required to issue this license is Rs. 300 for three years.
Documents Required for the Eating House License
Here’s a list of documents that are needed to get the Eating House License for restaurants:
- Documents to prove the legal occupancy of the place of Eating House and in the case of tenancy, NOC from the landlord.
- Site Plan containing details of the size of Eating House
- Photographs of the place showing its usage as an Eating House
- Photocopy of Valid NDMC/MCD/DCB/Airport Authority of India trade license and free receipt.
- Residence proof of the applicant
- An affidavit on the stamp paper of Rs.10 duly attested by Notary Public
- Fire NOC, if the seating capacity of the eating house is 50 or more
- Undertaking regarding the installations of CCTV Cameras with 30 days recording facility
How to get the Eating House License
- The applicant will have to first register himself or herself here.
- Using the user ID, you can fill up the form, upload all the necessary documents and fix an appointment. Self-attestation of all the documents you place is a must since it will ensure validation.
Here’s what the application looks like. You can download the full form here.
5. Shop and Establishment License
To run a food business in India, you must register your restaurant under the Shops and Establishment Act. For anything from a food truck to a fine dining restaurant. You need to register your restaurant within 30 days of the commencement of your business. This license is city specific.
Shop and Establishment Cost
The total cost you would incur amounts between Rs.200 to Rs.4,000 per year. However, the cost is relative as it depends on the number of employees and the location of the restaurant.
Documents Required for the Shop and Establishment License
- Pan Card
- Identity Proof
- Address proof of the proprietor, partner or the company
- Details of the employees
How to get the Shop and Establishment Act License
- Get the application form from here or your respective state government website.
- Submit the documents with the application form mentioning the name of the shop, the postal address of the establishment and the proof of ownership such as the Rent Agreement or Shop Lease Papers to the Local Chief Inspector.
- Once the government official verifies all the documents, he/she will register the restaurant in the Register of Establishment and issues a registration certificate.
- This certificate must be explicitly displayed at your restaurant and must always be renewed before its expiration.
6. Fire Safety License
A restaurant must protect their customers from all things dangerous, be it adulterated food products or hazards such as fire. A No-Objection-Certificate (NOC) from the fire department is thus required to run a restaurant.
Fire Safety License Cost
There is no fee required for NOC as of now.
How to get the Fire Safety License
- For this, the restaurant needs to register for NOC from the State Fire Department. Applications can be found online on the state government website.
- After having all the safety equipment in place, you must invite the Chief Fire Officer for inspection and get the NOC.
7. Lift Clearance
In case you want to install a lift in your multi-story restaurant, you need to get clearance from an inspector from the electricity department as well as the Labour Commissioner of that specific city. The Electrical Inspector issues this license from the office of the Labour Commissioner after verifying the installation of life, layout, safety gears and the like. State wise applications are available for obtaining lift clearance.
8. Music License
To play music at your restaurant, you need to obtain a restaurant music license. It is issued by Phonographic Performance Limited (PPL). If a restaurant plays music and operates without the said license, they will have to face legal penalties.
9. Certificate of Environmental Clearance
Any restaurant is legally and morally bound to ensure that its operations must not negatively harm the environment. Hence, you are also expected to apply for the Certificate of Environmental Clearance. For more details visit here.
10. Signage License
You need to market your restaurant well to ensure that your business garners the maximum profit. You need to obtain a signage license from the Municipal Corporation or some local authority for legally being able to use posters, graphics and paintings to market your restaurant in the nearby area.
Restaurant Taxation: The Goods and Service Tax (GST)
GST that came into force since 1st of July, 2017, has kept everyone hitched to it with these frequent changes. Both the restaurant industry and the government have been in loggerhead for long.
It is one tax that you need to pay unlike different taxes (VAT, Service Tax) earlier. You can easily register your restaurant for GST online and get it sanctioned with minimal hassle.
The tax rates applicable under GST for restaurants are as follows:
- For all the restaurants and hotels, AC or non-AC; serving or not serving liquor, the GST is set at 5%.
- For all the regular catering at restaurant premises, GST rate of 5% is applicable
- For all the outdoor catering by the restaurant, GST is set at 18%.
- Restaurants and hotels falling under the 5% GST slab and/or have an annual turnover of more than 1 crore INR cannot claim Input Tax Credit(ITC)*.
- Restaurants and hotels falling under 18% GST slab can claim ITC benefits.
- In case alcohol is served at a restaurant, GST will not be applicable on liquor. However, you can tax the consumer for alcohol with VAT and other state taxes. The same is not applicable to any bill including food items.
For more information on GST go here.
Your Next Steps
Keep in mind that the exact laws and regulations for each license are often specific to different cities, and states. Make sure that you understand all of the various licenses you will need on the state and city level. Obtaining them is a critical step towards opening your new restaurant and avoiding disastrous penalties.