How to Get a Bar & Restaurant License in India

Opening a bar & restaurant is more complicated than starting a restaurant as it requires more compliance and documentation. However, doing so allows business owners to generate more revenue and attract more customers. 

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 to sell liquor products in India 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 & Restaurant License 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 restaurant or bar
  • 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

  1. L-1 license – For the wholesale supply of Indian liquor to other license holders.
  2. L-3 license – For hotels to provide guests with foreign liquor in their rooms. (Requires approval from Tourism Department)
  3. L-5 license – For hotels to serve liquor in bars within their premises.
  4. L-19 license: For registered clubs to serve foreign liquor to members.
  5. L-49A license: For serving liquor at marriages or parties at a particular location in Delhi.
  6. Tavern License: Establishments that make 50% of their profits through the sale of alcohol
  7. Beer and Wine License: To allow restaurants and bars to sell milf liquor such as beers and wines
  8. Restaurant License: Establishments that make less than 40% of their profits from the sale of alcohol.
  9. 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 & 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

  1. ID proof of the applicant
  2. Applicant’s address proof
  3. Valid email id and Phone number
  4. Affidavit
  5. Food safety management plan
  6. Kitchen layout and schematic
  7. List of food categories
  8. Water testing report
  9. No-objection certificate from the owners of the business premises
  10. 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 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

  1. Proof of address of the business premises
  2. NOC from landlord and copy of the rental agreement, if on rent
  3. Site plan and layout
  4. Indemnity bond worth ₹100
  5. Structural stability certificate
  6. Power and water bills
  7. Proof of sewer connection
  8. Letter from police
  9. Water testing reports
  10. 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

  1. Proof of address of the business premises
  2. NOC from landlord and copy of the rental agreement, if on rent
  3. Site plan and schematic
  4. Photographs of the business premises
  5. Copy of the trade license
  6. Applicant’s ID and address proof
  7. Affidavit on an ₹10 stamp paper
  8. NOC from the fire department for housing more than 50 people
  9. 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, 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.

How to Apply for a Bar & Restaurant Liquor 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 analyse 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 them.

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 region. Moreover, as this can be a complicated and lengthy affair, most business owners rely on legal service providers to obtain their liquor license.

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 license without any hassles or delays!

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