What are the Essential Licenses Required to Open a Restaurant in India?
Suppose, you are an entrepreneur and have a dream to start a restaurant business in India. In this case, the most important task is to have adequate knowledge of the licenses required to open a restaurant in India.
The legal process varies from region to region and country to country. It is specific that you are going to start a restaurant business in India so you will require the licenses which are allowed for restaurant or foodservice businesses in India.
You may think, getting completed the paperwork at the beginning stage is overwhelming. Yes, as it deals with the state government rules and regulations, it may take more time and different processes. But if you are already an expert or have knowledge about the essentials and required licenses, you won’t face a big challenge.
When an entrepreneur chooses a particular business after considering different factors like budget, demands, location, and so on, one thing that must be remembered before starting the business is legal permission and license. Why the license for restaurants is essential.
Let’s see why licenses are required to open a restaurant business.
Protection for Your Business
A business license protects you, your business, your customers, and your employees. When you have business licenses for your business, you are legalized by the government so your business is safe and secured. It is one of the most important reasons for licenses required to open a restaurant in India.
Having the desired business license can assure your personal asset safety and in case your business gets damaged or hampered by something, the licenses protect you. Your income tax is automatically reported to the authority if you have a business license.
No need to fill any paper to pay your tax personally. If your business is at a loss, the tax amount will be deducted based on your business situation. In this case, you must need the correct license for your restaurant business.
Protection for Your Staff
Well, when you are an owner of an organization whether it’s small, medium, or large, you must have a number of employees. You can ensure the safety or protection of the workforce if you have legal permission or a license.
Your organization will be inspected annually if you are licensed. In this case, the staff of your business is also reviewed. If your employees are injured, your license can be the reason to get proper support.
Privacy the Personal Info
Personal information should be stored privately, Your business info and your personal info get protected if you are licensed properly. It includes your financial information, business assets, and other information.
However, to ensure the privacy of your private information, your business licenses play a great role. Privacy is needed so these are the essential licenses required to open a restaurant in India.
Safety for the Customers
The business license provides the safety of the customers. It depends greatly on the customer type you have. As a restaurant business owner, you directly serve the food to the customers. So the safety of the users must be ensured.
When your customers face a problem and it relates to your business, you and the customers both will be benefited provided that you have a business license. Among the licenses required to open a restaurant in India, safety for the customers is the most significant factor.
Building the Trust Level
As a business owner, when you can ensure the safety and protection of the customers legally, it enhances the trust level of your customers.
Besides, your license proves that you are permitted and legalized by the state government and responsible to serve the customers properly. It creates a positive impression among the customers.
Good for the Economy
Especially the small business gets financial support from the government when they need it. Besides, the permission and licenses will help you to establish your business. When your business runs well, you can feel your earning and profit increase. It directly affects your financial state.
However, it’s really needed to get licensed at first whatever business you have. The business licenses help the business owners to maintain the business, employees, customers, and privacy of the business information. Here you have seen the importance of licenses required to open a restaurant in India.
The licenses required to open a restaurant in India are enlisted below. But these essential permits and licenses are inevitable to start a business in India or any other country in the world. Let’s see what licenses are needed to start a restaurant in India.
Although the process of licensing and costs of licensing differ from state to state, the basic things are the same. The restaurant business licenses are more or less indifferent in many countries. Food licenses for restaurants are also inevitable. Without a food license, you can’t serve food to the customers.
The restaurant business licenses are needed when you are going to start a restaurant. The major licenses which are essential, you will get an overall idea about that. Besides, the costs of every specific license help you to get prepared with your capital.
FSSAI means Food Safety and Standard Authority of India offers this license to the restaurant business. This license is one of the most important licenses for the restaurant business.
The license of FSSAI is not only a restaurant business license but also the assurance of the food quality for the customers. The FSSAI provides a 14 digit registration number which is unique.
Every manufacturer, trader, and restaurant must have this registration number. Besides, the digit must be printed on all the food packages. It is a must to have this license among licenses required to open a restaurant in India.
You will require some documents or papers to get the FSSAI license. Take a look at the below part and ensure that you are ready with those papers.
Documents Required to Get FSSAI License
- Email ID
- Valid Contact Number
- Filled and signed form of FSSAI
- Address and ID proof
- Affidavit or partnership deed
- List of main stakeholders along with their identity proof
- Layout plan of the kitchen
- Food Safety Management plan declaration
- Food categories chart
- Employees medical certificate
- Owners NOC form that stands for no objection certificate
- Proof of possession of the location/premise
- ISI certified Water Testing Report
- Useful equipment lists
Types of FSSAI License
The licenses of FSSAI are three categories. Every type of license is appropriate for the specific restaurant business. Well, let’s see the types and who are eligible for the restaurants.
- FSSAI registration: The restaurant business makes turnover up to Rs. 12 lakhs/ year.
- State License: The food business has a turnover of between Rs. 12 lakhs and Rs. 20 Crore/ year.
- Central License: The restaurant makes a turnover of Rs. 20 Crore and above per year.
How to Apply for an FSSAI License?
After getting ready with all documents and required certificates, now you can apply for the desired license according to your restaurant. The process of application is easy and straightforward.
- At first log in FSSAI website and sign up
- After creating a username, you have to fill up an online application form with all documents
- Print out the filled online application form and submit it to the state or regional authority within 15 days from the date you have made the online application.
Costs of FSSAI License
Here, you can see the costs that you will require to get licensed based on your type.
- The registration fee is Rs. 100
- State license costs Rs. 2000 per year
- Central license costs Rs. 7500 per year.
The health department or municipal corporation provides this license. Public health should be the most concerning focal point according to the municipal corporation act.
A health license ensures that you are aware of the health and you maintain a standard level of health concerns of the health department.
Documents Needed for Health or Trade License
- Site plan (Three copies)
- NOC from the landlord or ownership proof
- Rent agreement (if rent)
- Indemnity bond for Rs.100
- Proof of sewer connection
- Letter from local police
- Restaurant plan and layout
- Property Tax proof
- Employees medical certificate
- Lal Dora certificate (Only in Delhi)
- Report of water test
- Structural Stability Certificate ( Approved by Structural Engineer)
- Electricity and Water Bills
- Plan of the Premises
How can I get Health/ Trade License?
You can apply for this license online or at CSB. You have to fill up an online form to get the health or trade license for your restaurant business. It will take 60 days to get your health or trade license after submitting the online application forms and documents.
Here the form is available:
- State’s Municipal Corporation website or
- Zonal Citizen’s Service Bureaus
For a restaurant that doesn’t have a health or trade license, the municipal corporation has the power to shut the business off. You must need the Health or Trade license among licenses required to open a restaurant in India.
Costs of Health/ Trade License
Every state has different policies and processes so the cost can vary from state to state. Besides, the required documents can differ. However, health or trade license costs depend also on the number of your employees. In this case, the range of the costs can be Rs. 500 to Rs. 50,000.
The toughest license is the liquor license and without the liquor license, you can’t continue serving the liquor to the customers in your restaurant.
You can collect it from the local exercise commissioner or the state government site. You will find the respective form on the particular website. Among the licenses required to open a restaurant in India, if you really want to sell alcohol, this license is obvious.
The liquor license is not similar for different industries including hotels, restaurants, and bars. In this case, you have to collect the desired license for your restaurant business. Without the appropriate liquor license, if any business owner sells liquor, they must be penalized even it can cause closing the restaurant business.
What are the Types of Liquor License?
- L-1 – Granted to company society or partnership running with manufactured units
- L-3 – Granted to working distilleries or bottling plans that are approved by the state or central government
- L-6 – Granted for retail vendors for liquor and beer by the state government
- L-10 – Granted for sale of foreign liquor and select Indian brands
- P-13 – Temporary license provided to hotels, pubs, and restaurants which are licensed to sell liquor inside or outside the premises for one specific day
- P-10 – Granted to serve liquor at a function on a specific day for anywhere in the city other than public parks
Required Documents for Liquor License
- Restaurant address proof
- Legal status proof regarding it is a company, partnership firm, or any other setup
- Business details copy
- Original application form
- MOA and AOA if the applicant is a company
- NOC from the fire service and municipal corporation
- Legal possession of the plot
- List of all directors of the company
- Photographs of applicant
- Copy of the latest IT returns
- Documents of income Tax assessment
- Proof of no criminal activities involvement
How to Get the Liquor License for Your Restaurant and Bar?
- At first, go to your State Government Site
- Find out the online form
- Then submit all required documents which are mentioned above to the Excise Officer.
- After checking the restaurant premises, the concerned officer submits it to the liquor graning authority.
- Afterward, when you get approved, you have to pay the fees based on the state policy.
- Finally, your license is issued legally.
To get a liquor license, the time can vary depending on the frequent evaluation by the government authority that you are eligible for the liquor license or not.
Costs for Getting Liquor License
When you are submitting the documents and online form, you will need Rs. 5,000. And for every individual alcohol brand, you will require to get licensed. In this case, you have to pay Rs. 50,000 additional cost for every spirits brand like whiskey, gin, rum, brandy, vodka, etc.
Licensing police commissioner provides an eating habit license to the restaurant owner. You will collect an eating habit license where you are going to open your restaurant. That means the location you have chosen to operate your business from that city police commissioner.
For the restaurants which planning for a public eatery, an eating habit license is mandatory.
Documents Required for Eating Habit License
- Documents to prove the legal occupancy of the place of Eating House and in the case of tenancy, NOC from the landlord
- Proof of residence of the applicant
- Site Plan containing details of the size of Eating House
- Photocopy of Valid NDMC/MCD/DCB/Airport Authority of India trade license and free receipt.
- Undertaken about amusement activities
- Fire NOC, if the seating capacity of the eating house is 50 or more
- Photographs of the area showing its usage as an Eating House
- An affidavit on the stamp paper of Rs 10 duly attested by Notary Public
- Undertaking regarding the installations of CCTV Cameras with 30 days recording facility
Application Process of Eating Habit License
- At first, go to the respective Police Licensing State website of the state or place where you want to start your restaurant business. Here you will get three major cities eating habit license forms.
- You can also collect the form from the police commissioner office of your state. When you register on the website, you will get a user ID and by using this created user name, you can fill up the desired form.
- Afterward, upload all required documents that are mentioned above and make an appointment. The documents should be attested properly as it requires valid information.
Costs Needed to Get an Eating Habit License
The eating habit license cost is not so high but you have to ensure adequate and proper documents. You will require Rs. 300 for three years.
A fire safety license is mandatory for the restaurant business. You must protect your employees and customers from hazardous things like fire. In this case, you have to obtain a NOC certificate (No Objection Certificate) from the fire service department of your state. These are the licenses required to open a restaurant in India.
How to Get a Fire Safety License?
- At first, you have to go to the state government site where you will get the State Fire Department website.
- Then you should register using the name of your restaurant.
- Before starting the construction of your restaurant, you should collect the fire department approval.
- Now you will get the online form and fill-up the form as per the required information
- Afterward, when your submission will be completed, you will invite the chief fire officer to inspect the equipment you have.
- Finally, you will get the NOC from the fire department of your state.
It will take 15 to 20 days to get the fire safety license upon inspection. The fire department website for some major cities in India
How Much Cost Do You Need to Get NOC from the Fire Department?
You won’t need any fee to get the fire safety license from the state government. It is free to have a NOC from the fire service.
The labor commissioner of the city provides the lift clearance. The electrical inspector issues this certificate from the labor commissioner. They verify the lift, layout, safety gears, and so on before providing the license.
If your restaurant is in a multistoried building, in that case, you must require this license. The life clearance ensures that you are taken care of the safety norms.
How to Get the Lift Clearance License?
You have to register on the state government site especially the Electricity Department and Labor Commissioner to get the license. Some states electricity department’s websites are provided here.
A shop and establishment license is the most important license that should be obtained by any type of restaurant business. It is mandatory if your employees’ numbers are above 10. The shop and establishment act establishes the welfare of the employee.
This act regulates the terms and conditions of employment in commercial establishments. This important law is enacted under the Ministry of Labour, this act regulates
- working hours,
- overtime pay,
- intervals for rest,
- opening and closing hours,
- public holidays,
- paid leaves,
- maternity leaves, etc.
You must get the shop and establishment license within 30 days of the commencement of your business. From a food truck to a fine dining restaurant, every restaurant must have this license.
Documents Needed for Shop and Establishment License
- Pan Card
- Identity Proof
- Address proof of the proprietor, partner, or the company
- Details of the employees
How to Obtain the Shop and Establishment License?
- Firstly, you have to apply through statewide websites. You can get the application form from this website or your State Government website.
- Submit the application form with all the documents you require. In this case, you have to include your restaurant name, postal address, proof of ownership including lease paper or rent agreement. You will submit those documents to the local chief inspector.
- After evaluating all your provided papers, the government authority will provide you a registration certificate.
- This certificate must be displayed at your restaurant
You can get this license within 7 to 10 working days. In case of changing any information, you have to inform within 15 days. Some states may provide the shop and establishment license for a lifetime. But generally, this license is valid for five years. And after expiring the date, you must renew it from the desired office.
You can visit these particular state’s website
Costs of Shop and Establishment License
The required costs can vary depending on the employee number and the location of your restaurant. Generally, you may pay Rs. 200 to Rs 4000 per year.
A municipal corporation or local authority provides the signage license. It is required for the restaurant business owners to conduct promotional activities including posters, paintings, and graphics.
You have to obtain the signage license from your Local Civil authorities like City Corporation. Marketing your restaurant is an essential part. But in this case, you must have a license from your local government body.
Employee provident fund is mandatory for the restaurant business. The restaurants have more than 20 staff, the provident fund registration is essential for them and in some states, it starts from 10 employees.
Besides, the employees who get less than Rs. 15000 per month, must have a provident fund in the workplace.
The restaurant business owner can apply for the provident fund registration online. The Ministry of Labor and Employment provides this EPF certificate. You can apply on the government portal to get the certificate.
After submitting the application online, it will take 10 to 15 working days.
You may play music in your restaurant for entertainment purposes. But you have to obtain a license to play the music at your restaurant and it’s known as a music license.
If any restaurant doesn’t have a music license but plays music, they will be legally penalized for sure. The music license is in compliance with the Copyright Act of 1957.
How can You Get a Music License?
The Phonographic Performance Limited (PPL) provides this license. You have to apply on the PPL website to get a music license. Besides, the Indian Performing Rights Society also offers music licenses to business owners.
GST registration is mandatory for business owners in India. Indian government ensures that without GST registration numbers, no business can continue to run. In addition to this, the businesses which have above Rs 20 lakhs turnover, must have a GST registration.
Documents Required for GST Registration
- Pan Card of Proprietor/Partnership Firm.
- One passport-size photo of proprietor/all partner.
- Partnership Deed
- Mail ID and Contact No.
- Aadhar Card of Proprietor/all partners
- List of Items to be purchased/manufactured
- Authority Letter in favor of dealing partner
- Bank Statement containing Name, Address, and IFSC Code of Branch of Bank.
- List of Items to be traded ( if you want to sell stuff over the counter also)
- Digital Signatures of authorized partners
- Allotment and possession letter from Authority
- Registered lease deed.
How to Get GST Registration of Your Restaurant?
The application process is straightforward. If any restaurant business owner wants to get GST registration, just go to this website: www.gst.gov.in/ and fill up the online form.
The restaurant business owner has to wait for 5 to 7 working days to get the GST registration number for the particular business. GST registration is one of the most considerable licenses required to open a restaurant in India.
The restaurant business must ensure that it won’t harm the environment or ecology. In this case, you must have to obtain an environmental clearance certificate. Besides, you should remember that is mandatory for any kind of business in India.
The Ministry of Environment, Forest, and Climate Change provides this certificate to business owners. An environmental clearance license is one of the most essential licenses required to open a restaurant in India.
Documents Needed for Environmental License
You will require some documents like
- The Environmental Impact Assessment Report (EIA) or the Environment Management Plan (EMP),
- details of a public hearing, and
- NOC granted by state regulators.
How to Apply for the Environmental clearance License?
You can apply on the Ministry of Environment, Forest, and Climate Change website and submit your application form with all required documents.
However, licenses required to open a restaurant in India are explored here with the desired places where you can collect it and with an overall idea of restaurant license cost in India.
Here, you got the idea of what licenses are required to open a restaurant in India. But it may vary depending on
- The area where you are going to open a restaurant and
- The type of restaurant which you will start.
Suppose, you are interested in opening a restaurant in the city area. In this case, you have to acquire all required licenses that are explored in the above part except liquor license if you are not going to sell alcohol.
On the other hand, if you are going to start a restaurant in an urban or suburban area, in this case, you may not require all licenses which are mentioned.
Moreover, the provident fund registration will not require if you are going to open a restaurant with a short budget and your employee number is less than 10.
“So, at first, find out the most profitable restaurant type based on your budget and locality. Then contact the specific government authorities in your area. It will help you to get a complete idea of which types of licenses will be mandatory for your business.”
Okay, now you know the licenses required to open a restaurant in India. But what should be the next step? Let’s take a look at some essential steps after getting licensed and permitted for the restaurant or food business.
- At first, you have to make a plan for your restaurant and set the aim and objectives of your business.
- Based on your plan, you have to conduct different activities.
- Hire the best staff and provide them proper training.
- Research the demands of the customers
- Analyze the marketplace
- Research your competitors
- Proper restaurant marketing plan
- Ensures proper service
- Keep up to date with new technology
Are you Ready to Ensure Your Restaurant’s Future?
When you have to face a ton of responsibilities to maintain your restaurant business, technology provides a modern solution for you.
Suppose, you are conducting your business manually. In this case, you have to maintain the accounts, employees, inventory, supply chain, orders, customers, and other essential activities. Are these operations doing manually easy?
Exactly not. It’s totally overwhelming. In this regard, we designed digital and advanced restaurant management software according to the requirements of the restaurant professionals.
However, choose the best restaurant management software and ease your all operation in a time and cost-efficient way.
Let’s take a look at the key features of RMS
- A complete dashboard
- Dynamic website
- Android and iOS app integration system
- Online and offline POS system
- Restaurant billing system
- Orders and customers management
- HR management
- Inventory management system
- Supply chain management
- Accounts management
- Table reservation system etc.
Now you have an idea of licenses required to open a restaurant in India and restaurant license costs in India. Besides, you get a complete guideline to make your restaurant business smoother.
In this case, you will need restaurant management software. So why are you wasting your time? Integrate the modern restaurant management system to ensure your restaurant business’s future.