Opening a bar and restaurant is more complicated than starting a restaurant, as it requires more compliance and documentation. However, business owners need to obtain a bar and restaurant license in India to sell liquor products in India legally.
Opening a restaurant requires careful research, thought, and planning. If you wish to open a bar and restaurant, then the process becomes even more complicated. Doing so requires extensive documentation and compliance measures, such as licenses and registrations. However, such establishments allow entrepreneurs to diversify their business model and generate revenue from food and liquor. Business owners need to obtain a bar and restaurant license in India to sell liquor products legally. Are you planning on adding alcohol to your restaurant menu? If so, read on to learn more about the bar license and the documents required for the same.
What Is a Liquor License?
Any restaurant or establishment that wishes to serve liquor in India requires an appropriate liquor license. Operating a bar without this license can lead to huge penalties, shutdowns and legal repercussions. To apply for the same, business owners must contact their local excise commissioner. Since liquor laws vary from state to state, entrepreneurs must research local excise laws to stay compliant and apply accordingly. Therefore, make sure you take the help of a legal expert to understand your state’s liquor laws and file for the appropriate type of license.
How Much Does a Bar and Restaurant License in India Cost?
In certain states, there is a fixed annual licensing fee depending on the restaurant’s location. Top tier cities have an annual licensing fee of ₹10 lakhs, whereas tier 4 cities charge ₹2.5 lakhs. In other states, businesses must pay a processing fee of ₹5,000 after submitting the documents. Following this, the restaurant owner must pay ₹50,000 for each spirit brand or type they wish to sell in their restaurant.
Documents Required for Liquor License
- Company registration or incorporation certificate
- Proof of address of the business premises
- Completion certificate of the bar or restaurant
- Trade license
- Eating house license registration from the District Commissioner of Police
- New GST registration
- NOC from the state fire department
- Affidavit ensuring the applicant has no outstanding dues or criminal history
Types of Liquor Licenses
- L-1 license – For the wholesale supply of Indian liquor to other license holders.
- L-3 license – For hotels to provide guests with foreign liquor in their rooms. (Requires approval from the Tourism Department)
- L-5 license – For hotels to serve liquor in bars within their premises.
- L-19 license: For registered clubs to serve foreign liquor to members.
- L-49A license: For serving liquor at marriages or parties at a particular location in Delhi.
- Tavern License: Establishments that make 50% of their profits through the sale of alcohol
- Beer and Wine License: To allow restaurants and bars to sell milf liquor such as beers and wines
- Restaurant License: Establishments that make less than 40% of their profits from the sale of alcohol.
- Personal Bar license: Allows individuals to sell alcohol on behalf of a registered and licensed business.
What Are the Licenses Needed to Run a Bar and Restaurant in India?
While choosing the right location and hiring quality staff is essential, getting the proper licenses is a make-or-break aspect of opening a bar or restaurant. Hence, let us take a quick look at all the documents and permits you will need to start operating such an establishment in India.
FSSAI License
All food business operators functioning in India must obtain a food license issued by the Food Safety and Standards Authority of India. It is one of India’s most essential licenses for any establishment dealing in food products. Moreover, the license serves as approval from the FoSCos FSSAI, certifying that the establishment meets the required standards of food security and safety.
Likewise, after registration, owners should display their 14-digit registration number on their food packages and at the entrance of their business.
Documents Required for FSSAI License
- ID proof of the applicant
- Applicant’s address proof
- Valid email id and Phone number
- Affidavit
- Food safety management plan
- Kitchen layout and schematic
- List of food categories
- Water testing report
- No-objection certificate from the owners of the business premises
- Medical certificates of employees
The FSSAI has three categories of licenses, depending on the nature and size of the food business. Entrepreneurs must meet with legal experts to decide what type of registration to obtain before applying. Further, after collecting all the required documents, they must duly fill out the appropriate application form and submit it to the FSSAI. Most entrepreneurs take the help of third-party legal service providers, such as Vakilsearch to obtain such licenses as they require careful documentation.
Trade License
The health and trade license ensures that your bar and restaurant follow all the protocols laid down by the health department. It also rules out the possibility of health hazards at your establishment and roughly takes 60 days to obtain.
Documents Required for Trade License
- Proof of address of the business premises
- NOC from a landlord and copy of the rental agreement, if on rent
- Site plan and layout
- Indemnity bond worth ₹100
- Structural stability certificate
- Power and water bills
- Proof of sewer connection
- Letter from police
- Water testing reports
- Lal Dora Certificate, if applicable
Eating House License
Provided by the District Police Commissioner, the eating house license is necessary if you wish to serve in-house guests. To obtain this license, entrepreneurs must submit a form and the required supporting documents to the city police. Moreover, they will verify the documents, inspect the restaurant, and then approve the certificate.
Documents Required for House License
- Proof of address of the business premises
- NOC from the landlord and copy of the rental agreement, if on rent
- Site plan and schematic
- Photographs of the business premises
- Copy of the trade license
- Applicant’s ID and address proof
- Affidavit on an ₹10 stamp paper
- NOC from the fire department for housing more than 50 people
- Undertaking regarding CCTV installation with the facility to record footage for 30 days
Other Licenses You might Include:
- Shop Act License
- Fire safety license from the state fire department.
- Lift clearance if you wish to install a lift in your bar or restaurant from the electricity department and Labour Commissioner’s office.
- Additionally, a music license through the Phonographic Performance Limited, if you wish to play music at your establishment
- Certificate of environmental clearance to ensure your operation does not harm the environment.
- Signage: a license from the municipal corporation if you want to market your bar and restaurant.
- Further, GST registration to file your taxes on time and ensure that your business maintains compliance.
Benefits of a Bar License
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Legal Compliance:
The foremost advantage of obtaining a bar license is ensuring legal compliance. Operating without the necessary licenses can lead to severe penalties, closures, and legal complications. A valid bar license demonstrates adherence to regulatory standards.
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Business Legitimacy:
A bar license lends legitimacy to your business. It assures customers that your establishment operates within the bounds of the law, fostering trust and credibility.
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Expanded Revenue Streams:
With a bar license, you can diversify your offerings by including alcoholic beverages on your menu. This can significantly enhance your revenue streams, especially in the hospitality industry where drinks often contribute a substantial portion of overall sales.
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Attracting a Wider Audience:
A licensed bar can attract a broader clientele. For many patrons, the availability of alcoholic beverages is a deciding factor when choosing a venue for socializing or dining.
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Competitive Edge:
In the competitive landscape of the hospitality industry, having a bar license provides a competitive edge. It allows you to stand out among establishments that may not have the authorization to serve alcoholic beverages.
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Enhanced Customer Experience:
Offering a well-curated selection of drinks can enhance the overall customer experience. Whether it’s crafting signature cocktails or providing an extensive wine list, a bar license enables you to elevate your offerings.
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Event Hosting Opportunities:
A bar license opens up opportunities for hosting events and gatherings. From themed parties to wine tastings, the ability to serve alcohol enhances the appeal of your venue for various occasions.
How to Get a Bar License:
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Understand License Types:
Familiarize yourself with the types of liquor licenses available in India. Different licenses may have varying permissions and requirements.
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Research Local Regulations:
Regulations regarding bar licenses can vary by state and even by locality. Research and understand the specific requirements and procedures applicable to your intended location.
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Financial Planning:
Determine the cost associated with obtaining a bar license. This may include application fees, annual renewal fees, and other associated expenses. Proper financial planning is crucial.
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Application Process:
Follow the prescribed application process outlined by the licensing authorities. This typically involves submitting the necessary documents, including proof of premises, identity proofs, and business details.
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Engage Legal Assistance:
Considering the legal complexities involved, seeking legal assistance can streamline the application process. Legal professionals with expertise in licensing can guide you through the intricacies and ensure a smooth application.
How to Select the Right Location for Your Bar?
Demographics: Analyze the demographics of the area. Understand the preferences and behaviors of the local population to tailor your offerings accordingly.
Foot Traffic: Choose a location with significant foot traffic. High visibility and accessibility can contribute to the success of your bar.
Competition: Evaluate the existing competition in the vicinity. Assessing the market saturation and identifying unique selling propositions can help you position your bar effectively.
Zoning Regulations: Ensure that the location adheres to zoning regulations related to the operation of bars. Check with local authorities to confirm compliance.
Amenities and Infrastructure: Consider the amenities and infrastructure available in the area. Proximity to public transportation, parking facilities, and overall infrastructure can impact customer convenience.
Licensing and Permits: Confirm that the location allows for the necessary licensing and permits. Local regulations may vary, so thorough research is essential.
Ambiance and Theme: Assess the ambiance and theme of the area. Aligning your bar concept with the preferences of the target audience in the locality can enhance its appeal.
Bar Business Models – Types
Choosing the right concept for your bar is like picking the perfect outfit – it should reflect your style and cater to your target audience. Here’s a breakdown of popular bar models to help you find the ideal fit:
The Sophisticated Sip:
Lounges exude an air of elegance with plush seating and a focus on higher-end drinks. Imagine a well-dressed crowd enjoying meticulously crafted cocktails in a comfortable and stylish atmosphere.
A Taste of Spain:
Tapas bars offer a delightful combination of drinks and small, savory plates. Picture a lively space where patrons can socialize over shared dishes and a glass of wine or sangria.
Cheers to Good Company:
Pubs, the original social hubs, are all about meeting friends and catching up over a pint (or two!). They may also serve food, creating a relaxed environment for conversation and community.
Game On!:
Sports bars are a haven for fans. With TVs constantly tuned to the latest matches and a menu featuring pub fare, these spots are perfect for cheering on your favorite team with a drink in hand.
Night Owls Welcome:
Nightclubs cater to the late-night crowd seeking entertainment and dancing. Expect DJs, live music, and a vibrant atmosphere that keeps the party going until the early morning.
How to Apply for a Bar and Restaurant License?
Since the government is actively trying to reduce the sale of spurious alcohol, such registration requires stringent checks and verification. Further, on receiving such applications, the excise officer will analyze and verify all your supporting documents. In some instances, they will examine your restaurant premises before issuing the license. In case you have left out any valuable information, the officer will place your application on hold till you submit it.
Most states also have a notice period before issuing the license to allow people from the community to object to such an establishment. Additionally, if an objection arises, the business owners must defend their proposal at a hearing to decide the license grant.
Since excise laws vary between states in India, entrepreneurs need to research the liquor laws of their respective regions. Moreover, as this can be a complicated and lengthy affair, most business owners rely on legal service providers to obtain their liquor licenses.
Once you reach out to Vakilsearch, our representatives will schedule a meeting with you to understand your needs and requirements. We will then collect the required supporting documents from you and apply on your behalf.
Further, our team of legal experts will handle all the documentation required to ensure you receive your bar and restaurant license without any hassles or delays!
Time Limit
The wait for your liquor license can feel like an eternity, but here’s a heads-up on the typical timeline:
Review and Approval: Plan for roughly two months (60 days) for your application to be reviewed and approved by the licensing authority. This period allows them to ensure everything meets regulations.
License in Hand: Once approved, there might be an additional wait of 30 days or more to receive the actual license. This processing time can vary depending on local procedures.
Be Prepared: Don’t let the wait stall your plans! Factor this timeframe into your opening schedule and budget accordingly. Starting the application process well in advance will give you a head start.
FAQs
What license is required to open a bar in India?
To open a bar in India, you need to obtain a liquor license issued by the state excise department. The type of license required depends on the nature and scale of your establishment.
How much does a bar license cost in India?
The cost of a bar license in India varies widely depending on the state and type of license. It can range from a few thousand rupees to several lakhs, considering application fees, security deposits, and annual renewal charges.
What is a CL 7 bar license?
A CL 7 license in India permits the sale of liquor for consumption on the premises of a hotel, restaurant, or club. It is specifically categorized under the state's liquor licensing laws.
How many types of liquor licenses are there in India?
In India, liquor licenses are broadly categorized into various types depending on the nature of the establishment and the intended sale of alcohol. These include licenses for bars, hotels, restaurants, clubs, and special events.
What is the meaning of a CL 9 license?
A CL 9 license allows for the retail sale of liquor in sealed bottles for consumption off the premises. It typically applies to liquor shops, retail outlets, and wholesale suppliers by state regulations.
