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How To Start A Food Business In India

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India, food industry has a hug potential. We are having around 130 crore population to serve. The food sectors have shown high-growth and high-profit. The food business is actually very easy to start but need to know about the legal licensing requirement. It is considered as one of the best business to start in India. Below are some points we wants everyone to know before starting a food business:

Finalize Type of Business

The very first step is to decide type of business you want to start in food sector. There needs to be a proper planning before you begin. After completing all your research, planning and resources allocation, and next step would be to look around and arrange all the legal licenses or NOC required to avoid any legal penalties.

Registration of Business Entity

Register business entity is the basic step to start with. Following are some examples to consider for registration

  1. Proprietorship
  2. One Person Company.
  3. Partnership
  4. Limited Liability Partnership (LLP) or
  5. Private Limited Company (Pvt Ltd)

Before registering the entity under law, one can understand the legal compliance. Factors like “number of partners/investors”, “Business size”, “expectation turnover”, future plan etc. It helps in determining the type of entity you want to start with. Each of the types comprises its own advantage. Example if there are two or more persons come together to start a restaurant business, they can start a restaurant by registering it as Limited Liability Partnership or private limited company and can get benefits like limited liability of owner, continuous existence or separation of business/personal assets. However, one cannot get such benefits by registering as Proprietorship or Partnership. Therefore, now a day’s its recommended to select type of registration based on present and future requirements. Provide your contact details on our website to get free consulting on company registration.

FSSAI Food License

One of the necessary conditions after registering business entity is to obtain food License. As mentioned under the act, every food business operator (FBO) shall get its business registered or obtain a license under FSSAI. The basic motive is to assure the safety. Below are the categories in which FSSAI has divided food license based on the turnover limits of company:

Registration Type    Annual turnover

Basic registration:   Up to 12 Lakhs

State License:           Up to 20 crores

Central License:              More than 20 crores.

Failure of registration for FSSAI License may charge heavy penalties and considered as a legal offense. Food license is issued for 1 year to 5-year validity. Based on business requirement

Trademark Registration of Food Business

A Trademark is a sign/logo which determines your company brand image. A trademark may be located on a voucher, a label, a package or on product itself. Trademark helps companies to create image so to help them in growing faster. Trademark registration would provide ownership over the intellectual property created as sign/image/logo and help prevent the use of the branding by competitors

Fire Department NOC

The premises of a food manufacturing company shall have a proper plan of fire security. The owner/owners have to obtain NOC from the fire department by filing an application to the Authority. The Authority after conducting appropriate inspection on safety arrangement grant the NOC. Connect @ : +91 7558 640 644 to apply for Fire department NOC.

Health and Trade License

All FBO shall obtain a Health / Trade License from Health Department or Municipal Corporation of respected state. The license depends on the size of the Business. The Department or Municipal Corporation issues the license for one-year which need to be renewed every year. Every state has its own municipal laws. However, an application can be made online.

Insurance Required

It is mandatory for all food businesses to obtain insurance from any insurance company with regard to public policy, product liability, fire policy, building and assets. Other insurances though are not mandatory may be useful if taken. Connect @ 91 7558 640 644 to apply for Insurance for your business.

Environmental Clearance

Food business shall have to ensure that their actions are not involved in violating pollution standards by obtaining an NOC from the pollution board of the city/state.

Liquor or Bar license

If an owner plans to start a restaurant and wants to serve liquor than he has to obtain the Liquor license. The application shall be made to the Excise Commissioner of the city/region of the state for liquor license L-4 (L-17 as per new excise rule).

GST Registration

If a food business crosses the threshold limit mentioned by Govt of India, has to get registered under Goods and Service Tax. Fill contact details on our website to get free consulting on threshold limits, Restaurant voluntarily also can get register under Goods and Service Tax to enjoy the benefits of credits.

Verification Certificate

Verification certificate under the Standards of Weights and Measures Act, 1976 for each of the outlets issued by the Department of Legal Metrology of the respective areas,

License For Playing Music In Restaurants

A License for playing music in restaurants is also required for playing recorded or live music.

Eating House License Registration

Any place where food or drink is supplied for public consumption . Delhi Police Act requires a license to be obtained for operating an Eating House. An applicant has to apply for the Eating House License under the City/State Police Headquarters and the Police Commissioner. You can apply it through online.

Registrations Under Income Tax Act, 1861, Customs Act, 1962 And Other Labour Laws

As per central / state government rules and regulations, its mandatory get your business registered under Income Tax Act, 1861, Customs Act, 1962 and other labor laws. Connect @+91 7558 640 644  to apply for Registration under income tax act, 1861.

Employees' Provident Funds

Include registration under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 if it is engaging more than 20 employees.

Registration under the Central Excise Act

Registration is also required under the Central Excise Act, 1944 as in respect of goods specified in Third Schedule of the said act, repacking, re-labeling, putting or altering retail sale price etc. will fall into the category of manufacture. Connect @ : +91 7558 640 644 to apply for Registration under the Central Excise act.

Returns Required To File By FBO

Its mandatory for every food manufacturers, packers, labelers, re-packers, re-labelers and importers to file an annual return either electronically or in physical form as may be prescribed by the concerned Food Safety Commissioner, in Form D-1. This activity has to complete on or before 31st May of each year to the Licensing Authority with respect to the category of food products sold / manufactured by him during the previous financial year.

All food business operators must note that a separate return is required to be filed for every license issued under the Regulations, irrespective of whether the same Food Business Operator holds more than one license delay or non-filing of returns may charge penalty on FBO. Connect @: +91 7558 640 644for Company Annual Returns.

Takeaways

Starting a food business in India is absolutely a great Idea. In today’s world, start a food business in India is no more a traditional approach, it’s very important to understand about the legal compliance to comply since it may affect the food business and may charge have penalties. Its highly recommendable to all food operators to get their business registered under the law and comply the provisions timely.

BOOK A FREE CONSULTATION

Get help from an experienced legal adviser. Schedule your consultation at a time that works for you and it's absolutely FREE.

Author
Vinay Singh
Vinay Thakur is Managing Partner in Corpseed. He focused on payments, digital transformation, and financial technology for over 15 years and holds strong expertise on fintech startups, banking innovation, and investors with a keen understanding of the trends and activities of startups, banks, and investors in the space.