If you are planning to open a hotel or a restaurant in India, it is a good idea to know about the licenses needed to open a hotel in India. Some are absolutely mandatory while other are optional in some states. Some licence need to be procured even before starting construction so do begin early and keep in mind sometimes it takes time to get them. India has many states and many regulations so you might have to check with a law firm or lawyer specializing in hotels on all the legal requirement.
However some of the major ones are listed below which will help you to start off.
Fire Security Certificate: It is as of date the most important of all the licence. Without Fire NOC it is very difficult to get any other permission. It is mandatory to follow all fire safety guidelines and have proper fire security arrangements. A No Objection Certificate (NOC) has to be obtained from the Fire Department. Post your application, the inspection would be carried out and the decision will be taken by the officials of the Fire Department for the grant of the NOC.
Food Safety License: This is given by the Food Safety and Standards Association of India administrated by Ministry of Health & Family Welfare, Government of India. This act was established in 2006 and lays downs standards for articles of food and to regulate their manufacture, storage, distribution, sale and import to ensure availability of safe and wholesome food for human consumption. The FSSAI is a single point contact for all matters relating to food safety and standards. Please refer to FSSAI Act to view the details of this act.
Health Trade License: This is issued by Municipal Corporation or Health Department of the concerned state. The license gives permission to perform trade and business in items that have a direct effect on public health. By issuing this license the Municipal corporation certifies that your establishment complies with the hygiene and security standards essential for public health.
Eating House License: Eating House refers to any place to which the public are admitted, and where any kind of food or drink is supplied for consumption in the premises. This is provided by Licensing Police Commissioner of that city. You will have to refer to the Licensing Police Commissioner of that city to get specific details.
Liquor or Bar License: If you are planning to serve liquor then you must have this license. This can be obtained from local Excise Commissioner of your city or region.
Lift Clearance: If your hotel is multi storeyed and you will be operating a lift, you will have to get clearance for operating the elevator. Sometimes the permission has to be from the electrical inspector or the office of the Labour Commissioner of the city, to ensure that the lift operations comply with the safety norms.
Music License: If your outlet will be playing any recorded music or video, you will have to obtain a license in compliance to the Copyright Act of 1957 issued from Phonographic Performance Limited or Indian performing Right Society. Both PPL and IPRS are separate organisations who license different sets of rights in the use of music. You may need a licence from both organisations. PPL works for the use of recorded music on behalf of record companies and performers, whilst IPRS works towards musical composition and lyrics on behalf of authors, songwriters, composers and publishers. Please refer to PPL India and IPRS for further details.
Signage License: This license will be issued by the local civic body like the Municipal Corporation of your city.
Pollution Certificate: Pollution Control Committee of your city or region will be responsible for providing this license or NOC to ensuring that the establishment does not violating pollution norms. These rules have become very stringent and are very tough to get if your site is not following the standards as laid down in the guidebook. Make sure to integrate the recommendations at a design stage itself
Certificate of Environmental Clearance (CEC): This is a permit required as a part of Environmental Management Act under the Ministry of Environment and Forests for certain type of projects. An assessment is done to rule out any negative impact to the environment by the CEC authority post filling a questionnaire.
The main insurances that need to be procured are
- Public Liability – under the act Public Liability Insurance Act, 1991. This insurance covers the amount which the insured becomes legally liable to pay as damages to third parties as a result of accidental death, bodily injury, loss or damage to the property belonging to a third party.
- Product Liability – Under this, if your product proves to be dangerous or defective and it causes injury to a person or property, then this insurance cover is just what you need.
- Fire Policy – This policy will indemnify you against damage to your property caused by fire, lightning or explosion. You can choose to upgrade your policy to cover other perils such as storm, riot, leakages etc.
- Building and Asset – Buildings, plant, machinery and stock are covered for accidental and sudden loss or damage.
There are other insurance policies also which are not mandatory but useful. Insurance policies can be obtained from any insurance company providing such insurances.
Shop and Establishment Act: The Shop and Establishment Act is regulated by the Department of Labour and regulates premises wherein any trade, business or profession is carried out. This act regulates areas such as working hours, rest interval for employees, opening and closing hours, closed days, national and religious holidays, overtime work, rules for employment of children, annual leave, maternity leave, sickness and casual leave, etc. Shop & Establishment License can be obtained by applying to the State Chief Inspector of Department of Labour.
Approval from the Weights & Measures Department: As per the Legal Metrology Act, 2009, you have to get models of weighing & measuring instruments approved from the Weights & Measures Department.
GST registration: The recent amendment to the GST has made it compulsory to apply for GST registration and to follow the process laid down to collect tax. Registration is simple and online and there are many firms specializing in helping you to register for the same.
Trademark Registration: If you are planning to open a chain and are going to be investing a large amount of time and money into branding, it is advisable to obtain a trademark registration. Trademark registration provides ownership over the intellectual property created and helps in avoiding the anybody copying the branding.
Classification of Hotel: The last registration you might look at is the classification of the hotel. It is not mandatory however helps you to brand and market the hotel. It is done by the Ministry of tourism and in order to be classified, you need to begin from the project stage itself and fill out the form online on the tourism website.