Licenses and Permits for Hotel and Catering Establishments

student may understand about the Hotel Law related to Food and beverage service

1. UNIT 2 LICENSES AND PERMITS FOR HOTEL & CATERING ESTABLISHMENTS

2. TWO STAGES OF HOTEL LICENSE PROJECT STAGE PROJECT OPERATIONAL STAGE

3. PROJECT STAGE In this stage, the Hotel requires Licenses & permissions from various government regulatory bodies prior to the commencement of their project. In certain cases, the Hotel will require Licenses and permissions during the construction phase of the project.

4. PROJECT STAGE THE CENTRAL AND STATE GOVERNMENT OF INDIAN FROM TIME TO TIME ANNOUNCE VARIOUS INCENTIVES TOWARDS CONSTRUCTION OF HOTELS. THE SUBSIDY ON CAPITAL INVESTMENT IN HOTEL PROJECTS Subsidy on (Land Cost, Cost of Construction, Plant & Machinery, Equipment Etc.) Sales Tax waiver for a period of 5 years from the date of Commencement of Hotel Operations or exemption from building or property tax. The newly consturted hotels enjoy a partial reimbursement of electrical expenses in first 5 years of operations.

5. PROJECT STAGE Land for construction of hotels can get a 25 percent subsidy against the acquisition cost. Under the Export Promotion Capital Goods (EPCG) scheme concessions in imports of equipment‘s for Hotel operations is granted. Subsidy up to 60 percent against the Insurance premium for the first two years.

6. Project Stage Operational Stage: In this stage the Hotel requires Licenses and permissions required from various governments regulatory bodies during the closure of the project and in some cases during the commencement of hotel business operations.

7. OPERATIONAL STAGE: On completion of the Hotel building interiors, the Partial completion certificate (PCC) is converted to Completion Certificate by the municipal corporation. After this, stage the Hotel company forwards an application for the Occupancy Certificate (OC) from the Municipal corporation. The Municipal corporation issues this certificate after the Hotel has obtained all permissions from the various government authorities.

8. BOARDING & LODGING LICENSE This is issued by the Additional commissioner of police, Licensing Branch It becomes mandatory requirement of the Hotel to collect relevant details of the guest at the time of Registration.

9. Application Form should have the following details: i . . Proposed name of the Hotel ii. Name of the promoters with a note on the business antecedents in not more than 60 words iii. Complete postal address of the promoter with Telephone, Fax and Email address. Iv. Status of the owner/promoter: If Public/private limited company, the copies of Memorandum and Articles of Association. b. If Partnership, a copy of Partnership Deed and Certificate of Registration. c. If proprietary concern, name and address of proprietor / Certificate of Registration. v. Location of hotel site with postal address

10. Details of the site: a) Area (in sq. feet) b) Title - owned / leased with copies of sale / lease deed. c) Copy of Land Use Permit issued by Competent Authority to construct Hotel from local authorities. d) Distance (in Km) from: (a) Railway station (b) Airport (c) Main Shopping center / water body.

11. Details of the project: a) Copy of Feasibility Report b) Star category planned c) Number of rooms (with attached bathrooms) and size for each type of room (in sq. ft) d) Size of bathrooms (in sq. ft.) e) Details of public areas with size in sq. ft. - Lobby / Lounge; Restaurants; Bar; Shopping; Banquet / Conference halls; Business centre ; Health club; Swimming pool; Parking facilities (no. of vehicles) f) Facilities for the differently abled guests (room with attached bathroom earmarked for this purpose, designated parking, ramps for free accessibility in public areas and to at least one restaurant, designated toilet (unisex) at the lobby level etc.

12. Details of the project: g) Eco-friendly Practices (a) Sewage Treatment Plant (b) rain water harvesting (c) waste management (d) pollution control method for air, water and light (e) introduction of non CFC equipment for refrigeration and air conditioning. h) Energy / water conservation (use of CFL lamps, solar energy, water saving devices/ taps). i ) Details of Fire Fighting Measures / Hydrants etc. j) Date by which project is expected to be completed and become operational. k) Any other additional facilities. l) Security related features. m) The architecture of the hote1 building in hilly and ecologically fragile areas should incorporate creative architecture keeping in mind sustainability and energy efficiency and as far as possible in conformity with local art and architecture with use of local materials.

13. Blue prints/ Building Plans signed by the owner, the architect and approved by the competent authority showing: 1 Site plan Front and side elevation 2 Floor plans for all floors 3 Detail of guest rooms and bath rooms with dimensions in sq. ft. 4 Details of Fire Fighting Measures/ Hydrants etc. 5 Air-conditioning details for guest rooms, public areas

14. Local approvals by: Municipal Authority Concerned Police Authority Any other local authority as may be applicable / required (viz. Pollution Control Board/ Ministry of Environment & Forests etc.) Approval / NOC from Airports Authority of India for projects located near Airport

15. RENTAL CONTROL ACTS FOR HOTELS & LODGING HOUSES: These are Acts to provide the control of rents and evictions. This includes the Rates, Tariffs of Hotel & Lodging industry. Lease of vacant commercial premises in the specified area is covered in this act. This act is otherwise known as Rent Control Act.

16. Export Promotion Capital Goods Scheme: The Export Promotion Capital Goods (EPCG) Scheme allows import or domestic sourcing of capital goods at 0.30 percent customs duty for all sectors as against the normal total of 25.852 percent. This means a duty saved to value of more than 25.55 percent of the import value. This duty saved is subject to an Export Obligation (EO) equivalent to six to eight times of the duty saved to be fulfilled in a period of 6 / 8/12 years from the date of issuance of the License.

17. Shop‘s and Establishment Act: Registration of Hotels, Restaurants and other commercial catering establishments under the shop‘s and establishment Act is mandatory in nature.

18. Hotel Classification: - Hotels in India are classified from one star to five stars deluxe by the Department of Tourism. A Hotel must apply for classification within three months of its being operational. NOC from Chief Fire Officer: - As each state in India frames its own fire safety & prevention laws. The Hotel in the resident state must take the approval of the Chief Fire officer of the town / city. Restricted Money Changer‘s License: - Restricted Money Changer‘s License is issued by Reserve Bank of India to the Hotel. The Foreign currency received by guests through Encashment certificate is then given to the banks or full-fledged money changers. Lift Operating License: - License to operate a lift is given by the chief Inspector of Lifts. NOC from Pollution Board: - The pollution control board after inspection of installed STP‘s, provision for rain water harvesting and DG will issue a NOC. Permission to Install Signage and Hoardings: - The permission to Install Signage and Hoardings is given by municipal corporation. Swimming Pool & Cooling Tower permission: - Swimming Pool & Cooling Tower is checked by the police and then permission is granted.

19. FOOD & BEVERAGE OPERATIONS The Laws that effect the Production & service of Food & Beverage. These are commonly referred as ― “Food Laws”.

20. FOOD LAWS HEALTH TRADE LICENCE EATING HOUSE LICENCE SANITARY LICENCE LIQUOR LICENCE NOMINATION UNDER FOOD SAFTEY STANDARD ACT, 2006 CERTIFICATION OF WEIGHT SCALE AND PEG MEASURE

21. Health Trade License Generally, The Factories Act lays down conditions for safeguard towards health and safety of employees of organization. But, in case of Hotel Industry, Health Trade License is issued by the Directorate of Health Services to restaurant‘s, Eating Houses or other catering establishments

22. Eating House or Restaurant License : The Restaurant License is issued by the police commissioner upon receiving the Health trade license. Sanitary Certificate: The Sanitary certificate is issued by the Health Department. Liquor License: The hotels require L-3 License for Room Service and L-5 License for Bars in star category hotels. Nominations under the Food Safety and Standards Act, 2006: The Food Safety and Standards Act (FSSAI) has retained the nomination under section 17 (2) and Rule 12-13 of the Prevention of Food Adulteration Rule 1955. This makes the Hotel‘s management mandatory to nominate Manager / Supervisor for day-to-day operations of Restaurant. Certification of Weighing Scales and Peg Measures: The Certification of Weighing Scales and Peg Measures is done under the FSSAI Act.

23. Personnel Department T he Personnel Department is responsible for welfare activities of employees. This may involve activities like providing Provident Fund (PF) and Employee state Insurance Corporation (ESIC) authorities. LABOUR DEPARTMENT REGISTRATION EMPLOYEE PROVIDENT FUND REGISTRATION EMPLOYEES STATE INSURANCE SCHEM PROFESSIONAL TAX ENROLMENT CERTIFICATE

24. Labour Department Registration T he hotel register‘s with Labourdepartment . This registration requires the hotel to submit annual returns to the Labour office on the manpower strength of the hotel with minimum wages, date of payment & list of holidays under the National and Festival Holidays Act,1958.

25. Employee Provident Fund Registration: The Hotel has to Register itself with the Provident Fund commissioner‘s office under the Provident Fund Act,1952. This will lead to the Hotel obtaining the establishment code.

26. Accounts Department The accounts department register‘s the Hotel with appropriate tax authorities and ensures that all statutory compliance is met from time to time. Goods &Service Tax (GST)Registration: The Registration of all Hotel Property across different star classification has become mandatory in our country. A Unique GST Number is allocated to each of the Hotel property.The hospitality industry in the Indian economy, was liable to pay multiple taxes (VAT, luxury tax, and service tax) under the previous VAT regime. This is changed with a simplified Goods and Service Tax (GST). The hospitality sector stands to reap the benefits of standardized and uniform tax rates, and easy and better utilization of input tax credit. Permanent Account Number: Permanent Account Number (PAN) Registration certificate is a 10- digit alphanumeric Identity card issued by the Income Tax Department. Each assesses whether individual, firm or company have unique PAN Registration. Tax Information Network: Tax information network registration meets the requirement for e- filing of taxes records.These taxes filed can be checked by Accounts department.

27. Employee State Insurance Scheme: Every Hotel register with the Employee SatiateInsurance (ESIC) Scheme under the Employee State Insurance Act,1948.

28. PROFESSIONAL TAX ENROLMENT CERTIFICATE: The Hotel deducts professional tax of employees(whose annual income is more than Rs. 5000 per annum) and deposits on their behalf. This deduction is on the basis of Maharashtra State Tax on Professionals, Trade, Callings and Employment Act. 1975.

29. Accounts Department The accounts department register‘s the Hotel with appropriate tax authorities and ensures that all statutory compliance is met from time to time. Goods &Service Tax (GST)Registration: Permanent Account Number: Tax Information Network: Property Tax Certificate:

30. BANQUETING AND CATERING CONTRACTS Banqueting and Catering Contracts has been defined as the act of providing food and drinks on a given set of terms of contract. The range of responsibilities may involve delivery of meals, technical support or even full management of a restaurant. The contract that will be signed between the parties should disclose all material obligations to be involved in.

31. Event Details Cost Breakdown Service and Staff The Menu Wine and Spirits

32. LIQUOUR LICENCE Liquor is a liquid intoxicant, deriving its intoxicating potency from the ethyl alcohol in it Liquor can be divided into three broad categories, N amely (IMFL) Indian Made Foreign Liquor Beer Country Liquour

33. Liquor Legislation in India : Alcohol and Liquor Drinking Laws  India’s approach to alcohol consumption and liquor laws is a complex tapestry woven with threads of cultural diversity, historical influences, and socio-economic considerations .  The regulation of alcohol in India is primarily a state subject under the Seventh Schedule of the Indian Constitution, which leads to a wide variation in laws and practices across the country.

34. Historical Context of Alcohol and Liquor Drinking Laws The history of alcohol consumption in India dates back to ancient times, with references to alcoholic beverages found in Vedic texts and historical records. The regulation of alcohol has evolved significantly over the centuries. During the British colonial period, the excise system was introduced to regulate and tax the production and sale of alcohol. Post-independence, the Indian Constitution granted states the power to legislate on alcohol, resulting in diverse regulatory frameworks.

35. Constitutional and Legal Framework of Alcohol and Liquor Drinking Laws Constitutional Provisions: Article 47: Part of the Directive Principles of State Policy, Article 47 states that the State shall endeavor to bring about prohibition of the consumption, except for medicinal purposes, of intoxicating drinks and drugs which are injurious to health. Although not enforceable by law, it reflects the Indian state’s ideal vision regarding alcohol consumption. State Legislation: Since alcohol regulation is a state subject, each state in India has its own set of laws governing the production, distribution, sale, and consumption of alcohol. The laws vary significantly across states, with some practicing partial or complete prohibition while others have a more liberal approach.

36. Key Aspects of State-Specific Alcohol Laws 1. Age Restrictions: The legal drinking age varies between states, generally ranging from 18 to 25 years. For example: Delhi and Karnataka: The legal drinking age is 21. – Goa and Uttar Pradesh: It is 18. – Maharashtra: The age for consuming hard liquor is 25, while for wine and beer, it is 21.

37. Dry States: Several states in India practice complete prohibition: – Gujarat: A historically dry state since 1960, influenced by Mahatma Gandhi’s advocacy for prohibition. – Bihar: Implemented total prohibition in April 2016, under the leadership of Chief Minister Nitish Kumar. – Nagaland and Lakshadweep: Also observe total prohibition, although illicit trade and consumption are reported.

38. Partial Prohibition and Dry Days: Some states observe partial prohibition or designate specific days as dry days when the sale of alcohol is prohibited. For example: – Maharashtra: Observes dry days on certain religious and national holidays. – Kerala: Enforced a partial prohibition policy in 2014, limiting the availability of alcohol to five-star hotels and state-run liquor stores.

39. Licensing and Distribution of alcohol The production, distribution, and sale of alcohol require various licenses, regulated by state excise departments. The licensing process involves strict scrutiny and compliance with numerous regulations, including the establishment’s location, infrastructure, and safety measures.

40. Types of Licenses: Manufacturing Licenses: Required for breweries, distilleries, and wineries. – Wholesale Licenses: For entities involved in the wholesale distribution of alcohol. – Retail Licenses: For bars, restaurants, and liquor shops selling alcohol to consumers. – Consumption Licenses: Some states require licenses for individuals to consume alcohol, particularly for home consumption.