Manago Licensing

1. Food License :

Every food business owner including a petty vendor/ hawker needs to obtain a Food license from FSSAI. FSSAI stands for the Food Safety and Standards Authority of India. The FSSAI license is of 3 types:

• FSSAI Registration
• FSSAI State License
• FSSAI Central License

Application for FSSAI Registration / License can be made either offline or online. For obtaining the license offline, the food business owner shall send an application to the Licensing Authority along with requisite fees. However, for online license/ registration, the Food Licensing and Registration System (FLRS), portal launched by FSSAI can be used. On completion of the registration process, an FSSAI license number is provided to the food business operator. If the food business is operating in more than one state a central license will be needed for the head office / registered office. The license is issued with varying validity from 1 year to 5 years. Heavy penalties are levied on operators running a food business without FSSAI Registration/License.

2. Trade License/Eating House License :

Food business is usually granted Trade License as an ‘Eating House’ under the Municipal Corporation laws of the respective States in India. Any food business operator can obtain a trade license by making an application to the concerned municipality. Typically, the trade licenses issued 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 plan to open more than one outlet, every outlet must have a valid trade license from the concerned municipality.

3. Liquor License :

In case you are planning to serve alcohol along with the food, you will also require a liquor license. Selling of alcohol or its distribution without a valid liquor license is illegal and prohibited. You can approach the State excise department for obtaining approval to sell and distribute alcohol. There are many different types of Alcohol Licenses, it varies depending 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 be needing an identity proof, address proof, NOC from the fire department, NOC from the municipal corporation and other documents as the State Department may seek.

4. Fire Department NOC :

The Fire safety laws of most of the States in India consider the business of restaurants/ cafes/ hotels/ bakery to be a hazardous activity requiring a “No objection Certificate” from the Chief Fire Officer before commencing business. To obtain a fire license, you will have to submit building plans, model of the building and certificate from the Architect, and also fill out a questionnaire related to compliance with fire safety rules and regulations.

5. Shops and Establishment Registration :

Every owner of a shop or commercial establishment, having more than 10 employees, must obtain a shop and establishment registration from the respective State Labour Department.  This process has moved online in the recent past. This registration is typically valid for 5 years and thereafter it shall be renewed. Currently, some of the States are issuing Shops and Establishment Registrations, with lifetime validity on payment of renewal fees.

6. Pollution clearance :

Food business is considered as a polluting industry given the smoke emissions from the cooking process and washings of food waste. Therefore your food business will need a pollution license/ Certificate or consent to establish your business and Consent to operate from the State Pollution Control Board.  The category under which you will need a license will depend on the type and scale of operations of your business. You can see below the category wise separation given by the Central Pollution Control Board for hotels/restaurants.

• Hotels (Big) – Red Category
• Medium-Scale Hotels – Orange Category
• Non-alcoholic Beverages (Soft drink) – Orange Category
• Small Bakery/Confectionery – Green Category
• Small Hotels – Green Category

7. License for playing music or videos :

If you wish to play some pre-recorded music in your cafe/ restaurant/ hotel to accompany the Food you serve, you need to obtain a public performance license issued by Phonographic Performance Limited to avoid facing copyright infringement suits. This license aims to protect the interest of the artists who create the music or compose the lyrics and the owners of such creative/artistic works. In the majority of the cases, the public performance license is valid for 1 year.

8. Tax registrations :

• Income Tax :

  Every business, including the food industry, shall have a PAN and TAN in the name of the business or in the name of the individual ( in case of a Sole-Proprietorship) in whose name the transactions are to be made. PAN and TAN are two ten-digit unique alphanumeric numbers issued by the Income Tax Department. Every person who deducts or collects tax at source has to apply for the allotment of TAN. As per the recent changes, AADHAR can be used in place of PAN for filing IT Returns but PAN is still essential when it comes to making payments exceeding Rs 50,000.

• GST (Goods and Service Tax) :

  The VAT and Service Tax regime ended with the introduction of GST on 1 July 2017. Under the GST regime, tax is payable if the turnover of Rs.20 lakhs (Rs. 10 lakhs for North Eastern states & Special Category States) is achieved. All business liable to pay GST shall register and obtain GSTIN – a unique Goods and Services Tax Identification Number (GSTIN).

• Professional Tax :

  Professional Tax is levied by the local municipality on the salary paid to every individual. The tax rate varies from state to state. For payment of the professional tax, most States issue a registration certificate or an enrolment number, which will be used as a reference for remitting the tax.

9. Labour law Registrations :

There is more than 20 labour law legislation which is in force in India. A unified code of wages and a code of social security has been introduced by the Government of India to unify the central labour laws. The other state-specific laws, still prevail over any establishment conducting business in the respective state. Some significant labour laws which have registration requirements are as under:

• Employees State Insurance registration  is to be obtained by all establishments, including food businesses (excluding Factories) in ESI notified areas, having more than 10 employees. Employees earning less than Rs 21,000 per month are covered under this scheme. Any establishment that is exempted from obtaining ESI registration shall obtain an Exemption Certificate.
• Employees Provident Fund registration is mandatory for food businesses having 20 or more persons (10 persons in some states in India). In such cases, employees with monthly income less than Rs 15,000 shall be mandatorily covered under EPF.
• Contract Labour Registration will apply if you employ more than 20 workers under a contract.  They are called contract labourers. Usually, such workers are sourced from a manpower supply company for working as waiters/ servers/ housekeeping and security personnel. In case you employ this model for staffing your business, you will need registration as a Principal Employer to these contract labourers.

10. Infrastructure Licenses :

In addition to the above-mentioned licenses, you will need to have other licenses which are not specific to the food business but may be applicable depending on the infrastructure you invest in for your business. Such as, owning a Diesel generator with capacity above 500 KVA, requires a Genset registration from the Electrical Inspector.

Food Businesses which require to store Diesel, Kerosene, Liquid Petroleum Gas (LPG), Boilers, etc. may need a license from PESO if the quantum of such flammable materials exceeds the prescribed threshold. Here is the link to the PESO website for more details on how to obtain Infrastructure license.