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Licenses required for starting online food delivery services in India

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| Updated: Feb 07, 2019 | Category: FSSAI

Any person willing to start food delivery services is required to obtain specific licenses mandatory for the business. Therefore, in this blog, we will make you aware of all the licenses required to start food delivery services in India. But before that let us find out how food delivery services are doing in India so that you can ensure whether starting this business will be fruitful or not.

Food delivery services in India

Nowadays, people engaged in the business of food delivery services are gaining an astonishing income. Let us explain you how-

Most of the country’s population, i.e. students and professionals, stay away from home. Additionally, everybody doesn’t have enough time and skill for cooking and preparing food for themselves. As a result, they order food from outside, pay and eat.

In short, food delivery services already have a huge number of audience in the market which can help the start-up to create a good customer base easily.

For instance, Swiggy, Food Panda, Zomato, Uber Eats, etc. are unexpectedly generating a huge source of income. If we believe the reports, Swiggy scored a 232% surge in revenue in the financial year 2018 at Rs. 442 Crores from Rs. 133 Crores in FY17.

From the above data, you can observe that the profit gained by the company is more than three times the previous year. Hence, our take on this business is that if you start food delivery services, then you can surely gain tremendous revenue. The only thing you need to ensure is a strong business plan and obtaining all the permits essential for starting this business.

Mandatory licenses for starting food delivery services in India

As compared to restaurants, cafes, bars, pubs, etc., license required for food delivery services are quite less. It is imperative to acquire licenses before starting the business so that you can function smoothly and without any complication and legal interruption.

Licenses crucial for food delivery services in India are as follows:

  • Shops and Establishments Act License
  • FSSAI license from the Food and Health Department
  • Health or Trade License
  • E-commerce agreement
  • Trademark registration
  • GST registration
  • Signage License

Shops and Establishments Act License

Before you actually start your business, you must get the Shops and Establishment license from the concerned authority of your area or state. The Shops and Establishments Act is regulated by the Department of Labour. Furthermore, this act is enacted state wise. For example, if you’re commencing the business in Mumbai, then you will need to register with the Maharashtra Government.

If you find any difficulty while obtaining the Shops and Establishments Act license, you can contact an experienced consultant. Swarit Advisors is known to deliver the license in the least possible time.

FSSAI license from the Food and Health Department

The second most and pretty crucial permit for commencing any food business in India is the FSSAI license. FSSAI is responsible for ensuring public health protection and promotion through regulation and supervision of food safety.

One can acquire this license by filing an application with Food Safety and Standard Authority of India (FSSAI). Generally, there are three types of FSSAI license you can opt for:

  1. FSSAI Basic Registration: If you’re operating your business within a city or specific area and if your turnover is less than Rs. 12 lakh, then you need to apply for FSSAI basic registration.
  1. State License: Every FBO whose turnover lies between Rs. 12 lakh to Rs. 20 cores requires a state license to carry on the food business. Furthermore, any FBO engaged in activities like manufacturing, packaging, transportation, retail, etc. of food must procure state license.
  1. Central License: According to the Ministry of Health and Family affair, every FBO whose annual turnover surpasses Rs. 20 crores must obtain the central license. Apart from this, any food joint with its branches across various states is also mandatorily required to possess this license.

Therefore, depending on the nature of your business and annual turnover, you can decide what FSSAI license could be best for you.

Health Trade License

Health trade license is mandatory for specific businesses such as eating establishments, storage and sale, manufacturing units, etc. Essentially, the Department of Municipal Corporation is liable for the issuance of this license. Hence, you can apply to the municipal corporation of your city or area for obtaining the health trade license.

Generally, the license grants you permission for carrying out the trade or business in certain goods and services that affect the public health directly. Health trade license ensures that your business or establishment obey with hygiene and safety norms which are necessary for public health.

E-commerce agreement

E-Commerce Agreement is a contractual relationship among the website owner of the particular business and the third party. For example, in your case, the agreement would be among you, the delivery boy, and the restaurants or food providers.

A standard E-Commerce agreement must cover the following essential points:

  • Trademark: Because you’re delivering food, you will surely display the logos and info of the restaurants working with you. Therefore, to use their logo on your website, you will require their permission because they have the trademark rights of the logo.
  • Details of products or services: The agreement contains the complete detail of the items or services offered. For example, being a food delivery service provider, you must provide info about every food you’re going to deliver.
  • The term of agreement: Usually, the agreements are on a yearly basis. One party is provided with the right to terminate before the term expires. However, one needs to ensure that the term is long enough to justify the resources and time spent on marketing the products.
  • Payment: The agreement also explains the payment terms and conditions as mutual agreement between both the parties.
  • Customer payment: The agreement will also describe the mode of payment, customers can use to pay. Whether they will pay directly through the website of the food delivery services or through the third party’s website?
  • Customer information: Who will own the customer? Because you own the website and customer came because of your efforts and website, therefore you will have the ownership. However, the third party can claim the ownership later. Therefore, things are quite clear in the agreement regarding the customers and their ownership.

Likewise, confidentiality, disclosures, liabilities, jurisdiction, etc. there are many other things that an e-commerce agreement consists of so that no dispute or confusion arise later.

Trademark Registration

Trademark is a sign, design, name, logo or expression that distinguishes the products or services of a specific source from others. However, trademarks used for distinguishing services are known as service marks. Because you’re running a website, you must obtain trademark registration for your logo so that nobody else can use or steal it. There are 45 trademark classes. You can register your trademark in the class of services your business falls.

For trademark registration, you consult an expert. Swarit Advisors have a very good hands-on trademark registration. You can get your trademark registered in the least possible time with Swarit Advisors.

GST registration

As per Section 2 (44) of CGST Act, 2017 every business supplying goods or services online must get the GST registration done. For other businesses, there is a threshold limit of Rs. 40 lakh (applicable from the 1st April 2019) above which the business will have to take GST registration. However, there is no such threshold limit for e-commerce businesses. They have to obtain the GST registration mandatorily, irrespective of their annual turnover or income.

Signage License

Since you’re starting a business, you will want others to know about it. For making people aware of your business, you will need to promote it through various marketing strategy. Hence, for marketing your brand through positive reviews, pictures, posters, images, etc. you will require a signage license. You can approach your local civil authority such as a municipal corporation for obtaining this license.

Conclusion

From the above discussion, we can conclude that food delivery services are really earning a huge revenue. But, before you commence the business, you must ensure that you have obtained all the above licenses as discussed. As per the regulations of FSSAI, every food business operator must acquire the FSSAI license irrespective of the kind of food business you’re carrying on. Furthermore, you can avail many benefits of these licenses such as legal recognition, customer awareness, customer goodwill and trust, etc.

Therefore, if you are thriving to obtain these license for starting food delivery services in India, then you can contact Swarit Advisors. We are one of the leading choices of many and are known for the fastest delivery of the licenses.

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Khushboo Priya is an experienced Legal content writer with a prodigious proof-reading and research & development skill.

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