How to start a restaurant in India: registrations and licences you need
Restaurant licences in India: FSSAI, GST at 5% without ITC, shop and trade licences, fire NOC, eating house and liquor permits, with state variations.
Short answer
To open a restaurant in India you need an FSSAI licence or registration, GST registration once turnover crosses the threshold, a shop and establishment registration, a municipal trade or health licence and usually a fire NOC. Many cities also need an eating house licence, signage permission and music licences. A bar needs a separate state excise licence. Standalone restaurants charge GST at 5% without input tax credit.
- Core food licence
- FSSAI registration or state/central licence
- GST on standalone restaurants
- 5% without input tax credit
- GST in hotels with rooms above ₹7,500/day
- 18% with input tax credit
- Composition option
- Available to eligible restaurants
- Liquor
- State excise licence, separate process
- Who issues most licences
- State and municipal bodies
Which business structure suits a restaurant?
A single outlet run by one owner often starts as a sole proprietorship because it is quick and cheap to set up. The catch is unlimited personal liability, which matters in a business with leases, staff and food safety exposure.
If you have partners or plan multiple outlets, an LLP or private limited company is safer. A company is easier for raising investor money and for signing long leases in mall or high-street locations, while an LLP has lighter annual compliance. Licences are issued to the entity, so pick the structure before applying, or you will have to re-apply later.
What registrations and licences does a restaurant need?
Licences come from three levels: central law administered locally (FSSAI, GST), state law (shops and establishments, excise, fire) and municipal bye-laws (trade, health and signage licences). Names and thresholds differ by city, so treat the table as a checklist rather than a fixed list.
| Licence | Issuing authority | When required | Typical validity |
|---|---|---|---|
| FSSAI registration or licence | FSSAI / state food safety department | Before you start selling food | 1 to 5 years as chosen |
| GST registration | GST department (central and state) | Above threshold, or on aggregator sales | Until cancelled |
| Shop and establishment registration | State labour department | Most states, soon after opening | Varies by state; some lifetime |
| Trade or health licence | Municipal corporation | Most cities, before opening | Usually annual renewal |
| Fire NOC | State fire service | Depends on seating, area and building | Varies; periodic renewal |
| Eating house licence | Police or municipal body (city-specific) | Only in cities that require it | Varies by city |
| Liquor licence | State excise department | Only if serving alcohol | Usually annual |
| Signage permission | Municipal body | For external display boards | Varies by city |
| Music licences | Copyright owners or their agents | If playing recorded music publicly | Usually annual contracts |
How does GST work for restaurants?
Since the 2025 rate rationalisation, a standalone restaurant pays GST at 5% without input tax credit, whether the order is dine-in, takeaway or delivery. Restaurants inside hotels where any room was charged above ₹7,500 a day in the previous financial year are 'specified premises' and pay 18% with full credit. A standalone restaurant cannot opt into 18% by declaring itself specified premises.
Orders placed through food delivery apps are taxed differently. The app collects and pays the 5% on those sales under section 9(5) of the CGST Act, but you still report them in your returns. Small restaurants can consider the composition scheme, which has its own limits and conditions; check eligibility with your adviser if a large share of orders comes through aggregators.
What ongoing compliance should you plan for?
Food safety is continuous. Keep FSSAI hygiene records, staff medical fitness certificates and pest control logs, and file the FSSAI annual return if your licence category requires it. Renew municipal trade and health licences on time, because inspectors can seal premises for lapses.
On the tax side, file GST returns monthly or quarterly, keep purchase bills even though you cannot claim credit at 5%, and deduct TDS on rent and contractor payments where the law requires it. Once you cross 10 employees, check ESIC coverage; EPF becomes compulsory at 20. Professional tax applies in states that levy it.
Common mistakes first-time restaurateurs make
Most of these problems cost far more to fix after opening than before, because a closure order stops revenue while rent continues. Budget time for inspections and keep copies of every licence displayed or available at the outlet.
- Signing a lease before checking that the building's use permits a restaurant and can get a fire NOC.
- Opening on a basic FSSAI registration when turnover or capacity needs a state licence.
- Assuming aggregator sales need no GST registration; platform sales trigger registration from the first order.
- Playing commercial music without licences from the right rights holders.
- Letting the excise licence lapse while stock is still on the premises.
Step by step
- 1Choose the entity
Register a proprietorship, LLP or company and open a current account in its name.
- 2Vet the premises
Confirm zoning, building use and fire safety feasibility before you sign the lease.
- 3Apply for FSSAI
Pick registration, state or central licence based on turnover and capacity, and apply on FoSCoS.
- 4Register for GST
Register if you cross the threshold or plan to list on delivery apps.
- 5Get local licences
Apply for shop and establishment, trade or health licence, signage and eating house licence where needed.
- 6Clear fire and liquor
Obtain the fire NOC and, if serving alcohol, the state excise licence.
- 7Set up payroll compliance
Register for professional tax, ESIC and EPF as staff numbers cross thresholds.
- 8Calendar the renewals
Track FSSAI, trade, excise and fire renewal dates and GST return deadlines.
Related services
Sources
- Taxaj: GST on food, restaurants and food services (2026)
- EY Tax Alert: GST Council rate rationalisation effective 22 September 2025
- Bajaj Finserv: FSSAI licence types and fees
Written by the Refogo Editorial Team from the official sources above and checked on 2026-10-31. Laws, rates and due dates change, and authorities often extend deadlines, so confirm your own case with a qualified professional. This is general information, not legal or tax advice. Read our editorial policy or report an error to support@refogo.com.
Common questions
Is GST registration mandatory for a small restaurant?
Only once aggregate turnover crosses the state threshold for your category, or if you sell through food delivery apps. Aggregator sales require registration from the first order regardless of turnover.
Can a restaurant claim input tax credit?
Not at the 5% rate that applies to standalone restaurants. Only restaurants in specified premises, linked to hotel room tariffs above ₹7,500 a day, pay 18% and claim credit.
Do I need a police licence to run a restaurant?
Only in some cities. Several cities have historically required an eating house licence from police or the municipal body, and rules have changed in places, so confirm the current position with your local authority.
How long does a restaurant licence take?
Timelines vary by city and licence. FSSAI and GST are online and usually quicker; fire NOC and excise licences involve inspections and take longer. No authority guarantees a fixed timeline.