May 13,2019 | 20 min read

Legal Requirements for Starting a Food Business in India

Author - Associate Runa Jasia 

A restaurant is a place where people can sit and eat their meals in exchange for money. Everyone likes to eat something unique once in a while, what could be the best place like a restaurant. There is no doubt that it is a booming business which can never be in loss if the quality of service and food are great. Before starting any restaurant people select the concept behind their restaurant, place, amount of investment, begin hiring employees, deciding the menu, cuisine, etc. But they often tend to neglect legal compliances during the process of opening their restaurant. To run the restaurant smoothly, one has to pass through some legal procedures. It is not much time-consuming. There are specific numbers of licenses required to run a restaurant. 

1.    Food license

To establish a restaurant in India, then an application for food license is to make, which is provided by the FSSAI (Food Safety and Standard Authority of India). Anyone can file an application for this license online from the official website of FSSAI. Documents required for the food license registration are:

•    PAN card & Aadhar card

•    Passport size photos & addresses proof

•    NOC agreement

The state FSSAI license is provided to restaurants and hotels, and the central FSSAI license is provided to slaughtering units, proprietary foods, etc. The documents required for the state FSSAI license are a list of food items that will be served in the restaurant, NOC, contact details of all the essential members as well as the business owner, location of the restaurant, partnership affidavit of proprietorship, food safety certificate, etc. The license may stay valid for 1-5 years and can be easily renewed. But in case of any serious suspicion regarding the food quality such as finding stone in the food, food poisoning, etc. The license, then, can be suspended or taken away from the owner. Apart from this, if any violation takes place regarding the rules of FSSAI, then also the license will be taken away.

2.    NOC 

Non-Objection certificate from the fire department is necessary just in case an accident happens because of the fire. The restaurant must have all types of equipment related to deal with such situations. That’s why there is a fire exit present in all the restaurants. There was a case that happened in the New Years’ eve a fire tragedy at a birthday party in which 14 people were killed. So it’s vital to check the fire safety measures regularly. As fire accident can happen anytime. A NOC from the fire department is necessary to run a restaurant smoothly. It does not take even a few minutes to catch fire.

3.    VAT and GST Registration

GST- Goods and Services Tax

VAT- Value Added Tax

GST Registration is mandatory to the restaurant whose turnover exceeds more than 20 lakh INR annually or 10 lakh INR (in case of annual aggregate).GST is playing a vital role in the Indian economy. Because of GST, there is an increase in the demands of goods and services. Now there is less tax compliance; the process of tax has become more transparent for all the consumers and citizens of the country. It is responsible for the control and circulation of black money in the Indian market. GST was implemented from the year 2017. As because of GST, Removal of bundled indirect taxes such as VAT has taken place. So now there is no concept of VAT but GST across the whole country. 

4.    Liquor License

Liquor is an alcoholic drink. So if any restaurant has alcohol in their menu than they must have the liquor license. Liquor license is provided by the Excise Department of the respective state. It is a type of certificate which permits the restaurant to sell liquor. If a restaurant that are selling liquors does not have this license than it is a case of malpractice and illegal trade. To apply for this license, one must be the citizen of India, and there are more conditions to be fulfilled as per provided by the Excise Department of that particular state.

5.    Eating House License

This license is given by the License Police Commissioner of that specific place or the city. To get this license, one must know what an Eating House is. Eating House means a place where people can sit, eat and drink as per supplied by the restaurant. There are certain criteria to be fulfilled to get this license. 

So the licenses mentioned above are required to run a restaurant, but in addition to all of this, there are many other licenses necessary to run the restaurant such as trade license, environmental clearance, lift clearance, etc.


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