Which License is Required to Start a Canteen?

A canteen is a food service location where individuals can purchase and eat food. Canteens are often found in schools, universities and other establishments. To start a food canteen, you require certain licenses and certificates to ensure compliance with legal and regulatory requirements. 

In this blog post, we shall discuss some of the most important licenses and certificates necessary to start a canteen in India.

Why Start a Canteen Business?

A canteen is a popular food business that can be quite profitable when located in a crowded area, such as a university, school or any establishment that witnesses heavy foot traffic. It provides a space where people can purchase food and enjoy it on-site. 

Unlike a restaurant, a canteen is often considered a regular stop for customers and offers affordable food items and beverages, making it accessible to those with limited budgets. Given the consistent demand for canteens, starting this type of business can be a great opportunity.

Popular Locations for Canteen Business

Here are some popular locations for setting up a canteen business:

• School 

• University

• Military Base

• Railway Station

• Hostel

• Hospital

• MNCs

• Commercial Complex

• Transportation Hub

• Industrial Area

Licenses and Certificates Required to Open a Canteen in India

Below, we have provided you with the list of some of the key licenses and certificates required to open a canteen in India:

1. FSSAI License

One of the most important licenses for opening a canteen is the FSSAI license. This license is issued by the Food Safety and Standards Authority of India (FSSAI) under the Food Safety and Standards (FSS) Act 2006. This license is mandatory for food businesses in India. Without it, no food business can manufacture, sell or distribute food to its customers. 

It is important to note that there are three different types of FSSAI licenses i.e., FSSAI Basic License, FSSAI State License and FSSAI Central License. The exact license to be secured by a business depends on its annual turnover. 

In case the annual turnover of the business is below Rs. 12 lakhs, FSSAI basic license is required. However, in case of annual turnover between Rs. 12 lakhs to 20 crores, FSSAI state license is required. If the annual turnover crosses 20 crores, then FSSAI central license must be obtained by the food business. 

To secure a basic license, you must file an application using Form A. Form B must be used to file an application for securing state license or central license of FSSAI. 

2. GST Registration Certificate

GST registration can be both mandatory and voluntary depending on the exact case. It is mandatory for a business if its annual turnover exceeds the threshold limit of Rs. 40 lakhs for goods or Rs. 20 lakhs for services. If a business's annual turnover is below this threshold, GST registration is voluntary. However, even when it is not required, it is advisable to register for GST to enhance credibility.

To get your business GST-registered, you must visit the official GST website and file an application. Upon filing the application, the Application Reference Number (ARN) will be sent to registered email and mobile. Using ARN, you can track your application status. Once your business is finally registered under the GST system, you will be able to download GST registration certificate. 

3. Trade License

The Trade License is another crucial certificate that you must secure for your canteen business. This license is mandatory not only for canteens but for all businesses engaged in activities affecting public health. 

Since food businesses handle products that directly affect public health, it becomes necessary to secure the trade license. For obtaining the health trade license, you need to file an application with your state or union territory’s municipal corporation. If your application meets all the requirements, the authority will issue a trade license for your canteen.

4. NOC from Fire Services Department

A canteen requires a No Objection Certificate (NOC) from the Fire Services Department. Securing the NOC is essential to ensure compliance with fire safety rules and operate legally. To obtain a Fire Safety NOC, you must file an application with the Fire Services Department. Along with the application, you need to submit necessary documents, including building plans and fire safety equipment details. 

After the department reviews the application, it may conduct an inspection of your canteen premises to verify that your fire safety measures are in compliance with the department’s regulations and ensure the safety of the individuals in case of fire breakouts.

5. Shop and Establishment License

Shop and Establishment License is a legal requirement for operating businesses in India, including canteen businesses. This license must generally be obtained within 30 days of starting business operations. 

The application process for the license varies from state to state, as each state has its own version of the Shop and Establishment Act.

Conclusion

To start a canteen in India, you need to secure necessary licenses and certifications from the relevant authorities. One essential license to operate a canteen is securing FSSAI license, which ensures that your establishment meets the highest food safety standards. This license is issued by the Food Safety and Standards Authority of India. Other licenses/certificates necessary for a canteen include GST registration certificate via GST portal, trade license issued by municipal corporation, NOC from fire services department and shop and establishment license issued by the concerned state authority. 

For professional guidance and comprehensive assistance in setting up a canteen, we request you to connect with our consultants at Registrationwala.

Frequently Asked Questions (FAQs)

Q1. Is FSSAI registration required to operate a canteen in India?

A. Yes, FSSAI registration is a mandatory requirement for operating a canteen in India.

Q2. Does a canteen need to register under the GST system?

A. Yes, a canteen needs to register under the GST system if the business annual turnover exceeds the threshold limits for goods and services. 

Q3. Which authority issues trade licenses to canteens in Delhi?

A. The Municipal Corporation of Delhi (MCD) issues trade licenses to canteens in Delhi.

Q4. How to start a canteen in India?

A. To start a canteen in India, you must choose the place for business setup and secure necessary permits like FSSAI licence, trade licence, GST registration certificate, etc. 

Author: Manish Kumar

I’m Manish Kumar, a content management specialist. I simplify complex financial and regulatory topics into clear, insightful content. As a regular contributor to the Registrationwala portal, I provide updates on finance, Tax, government schemes, compliance, and other incorporation information. My goal is to keep you informed about key industry developments and their impact.