How to start a cloud kitchen in India: registrations and licences

Which structure works best for a cloud kitchen?

Cloud kitchens often run several virtual brands from one kitchen and expand to new locations quickly. A private limited company handles this well: it can own all the brand trademarks, take investment and sign contracts with aggregators in one name.

A solo founder testing one brand can start as a proprietorship or an LLP, but plan the move early. Aggregator listings, FSSAI licences and GST registration are tied to the legal entity, so changing structure later means updating every listing and licence.

What licences does a delivery-only kitchen need?

Because there is no dining area, some local permissions that apply to restaurants, such as eating house licences, may not be needed. That depends on the city. The food safety and tax requirements are the same as for any food business.

How is GST charged on app orders?

Restaurant service delivered through an e-commerce operator such as Swiggy or Zomato is taxed under section 9(5) of the CGST Act. The platform charges the 5% GST on the food to the customer and deposits it. You do not pay that tax again, but you report the sales in GSTR-1 and GSTR-3B.

The turnover exemption from registration does not help here. A kitchen selling through apps needs a GSTIN from the start. Orders taken directly, through your own website or phone, are taxed at 5% without credit and you pay that tax yourself. Platform commissions and fees carry 18% GST, which is generally a cost because restaurant service at 5% does not allow credit.

Ongoing compliance for cloud kitchens

Reconcile platform settlement reports with your GST returns every month. Platforms also deduct income-tax TDS on payouts at 0.1% of gross sales; check these credits in Form 26AS or the annual information statement before filing your income-tax return.

Keep FSSAI hygiene documentation current, because aggregators can delist kitchens after food safety complaints. If you open more kitchens, each location needs its own FSSAI licence and municipal permissions, and a kitchen in a new state needs a separate GST registration.

How do state and city rules differ for cloud kitchens?

Food safety and GST rules are national, but kitchen permissions are local. Some municipal corporations issue a single health trade licence for food premises, while others separate trade and health licences or tie approval to a fire inspection. Shared kitchen complexes may already hold building-level fire approvals, which can simplify your application.

Labour rules also vary. Shop and establishment acts are state laws, so registration timelines, working hours for delivery staff and night-shift permissions differ. If you run kitchens in two states, you will deal with two sets of labour rules and two GST registrations, each with its own returns.

Pitfalls to avoid

Shared or rented kitchens should check whose name the licences are in. If the landlord or kitchen operator holds them, your brand may not be covered, and an inspection could leave you without a valid licence.

• Using one FSSAI licence for multiple kitchen addresses.
• Not registering each virtual brand as a trademark before scaling marketing.
• Ignoring direct orders in GST returns because the platform pays tax on app sales.
• Running in a residential building where commercial cooking is not permitted.

Step by step

1. 1Form the entity

   Choose company, LLP or proprietorship and open a bank account.

2. 2Secure a compliant kitchen

   Check the property allows commercial cooking and can meet fire norms.

3. 3Get FSSAI

   Apply on FoSCoS for the right category for this kitchen address.

4. 4Register for GST

   Obtain a GSTIN before onboarding with aggregators.

5. 5Obtain local licences

   Apply for trade or health licence and shop and establishment registration.

6. 6Protect brands

   File trademark applications for each virtual brand name and logo.

7. 7Onboard on platforms

   Submit FSSAI, GST, PAN and bank details to each aggregator.