How Can you Start a Canteen Business in India?

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If you are planning to set up your canteen business, then you are at the right spot. Here in this article, we will be focusing in detail how to start a canteen business in India. Demand of canteen business in India is very high.  To start a canteen business in India we require systematic investment or capital. Utilizing your cooking skills in the canteen business is not at all a bad idea. When you are planning to have your canteen business, you must be well aware with regard to different documents and licenses which are must needed to run a smooth canteen business without any legal interruptions.

Is canteen business profitable in India?

About 98% of the unorganized catering industry in India is far from inclusive growth, despite the fact that the wedding industry of one lakh crore every year is growing by 25%–30%. Also, a significant number of developments in commercial and corporate events are taking place. Canteen business is a unavoidable, when there is many players in the market.

What are the different options of Canteen Business in India?

1. Canteen in School

2. Canteen in College

3. Canteen in Hospital

4. Canteen in different companies

5. Canteen in Railway

6. Canteen in Hostel

How to start a canteen business in India?

Before starting your canteen business in India, need to prepare a complete checklist. A pre-business plan would make things easier for you. Follow the steps given below to start your canteen business in India.

How Can you Start a Canteen Business in India?

Steps to follow for canteen business in India

  • Decide the budget and capital
  • Make a proper canteen business plan
  • Get a food license and permit
  • Prepare the layout of the kitchen
  • Prepare equipment list
  • Hire sufficient staff
  • Advertisement & Marketing
  • Different process of getting order etc.
  • Decide on the budget and capital: Decide on the budget and capital. The budget may different as per choice. We make a plan to set our money proficiently on on-site appliances, rental costs, licenses, transports, and other expenses.
    If we do not have sufficient money to start a canteen business, then we can start contacting investors. If we can present our business as an attractive and promising one, we will be able to attract investors cheaply. These days, several Government sectors provide schemes to small business owners.
  • Make a proper canteen business plan: Read the market, try to take well-attested feedback from customers, and consider how you can “fill the empty”. This is helpful to get more customers and pre-orders before the business is completely set up.
    Afterthought, decide on the location that needs and storage requirement also. Required permanent cooking and storage facility if we planning to a full-time business.
  • Get a food license and permit
    Before starting a canteen business need to take different types of permits and licenses. Few licenses have issued by the Government of India for dealing with food items. The vendor registration with FSSAI is compulsory for the food catering business. Also need to take different licenses i.e. shops & establishment, sewage, fire, and water, etc.
  • Prepare the layout of the kitchen: For order, serving will need more than 25 people and the space of the kitchen will at least 100 Sqft. Canteen businesses would bring more clients due to efficient and hygienic food. The rent for places would differ for each place. The average rent for 100 Sqft. the kitchen area would be between Rs. 8000 to Rs 10,000, the location is a prime factor.
  • Prepare equipment list: Need to invest capital on-site equipment. Burner stoves, fryers, and refrigerators, storage cabinets, sinks, cooking oven, serving equipment, coffee/beverage station, cambro, tin foil, plastic wrap, garbage bags, disposable containers, etc.
  • Hire sufficient staff: For successful business need hand workers. Responsiveness, adequate, Enthusiasm, Ambition, and dedicated employees are required. Maintain uniforms for all staff when they become trained.
  • Advertisement & Marketing: We can give advertisement in newspaper, television and social media. Advertisement is the best way for increasing demand in the market. Advertisement will promote our business. We can create our own website; it is helpful in build trust for our business.
  • Different process of getting order and payment etc. – Most people want to do give payment through mobile or card, so availability is extremely important. Take order and payment at the table. We will give a self-order system, kitchen display screen, etc. Which is suitable for the canteen business we can pick.

Which licenses are needed to start a canteen business in India?

FSSAI is the most important license for food quality. It is also compulsory for canteen businesses to take FSSAI license in order to meet legal requirements. The Food Standards and Safety Authority of India (FSSAI) is the top authority which is responsible for regulating and supervising food safety. FSSAI license is compulsory as per the law.

How many types of Registration?

1) Basic FSSAI Registration: If you have just started your canteen business and have not crossed the turnover of more than Rs. 12 lacs, then this basic license is for you.  As per FSSAI Act.

2) State FSSAI Registration: If you have just started your canteen business and have crossed the turnover of more than Rs. 12 lacs and upto 20 crores then this state license is for you.  As per FSSAI Act.

3) Central FSSAI Registration: If you have just started your canteen business and have crossed the turnover of more than Rs. 20 crores then this central license is for you.  As per FSSAI Act.

Documents for FSSAI registration to start a canteen business in India

For registration under the State and Central, the following documents are necessary:

  • Form A or Form B, as the case may be, duly filled and signed by Proprietor/ Partner
  • Pan Card Copy of applicant self-attested. In the case of Partnership Firm/ Company, PAN Card of such Firm/ Company is also required.
  • Address Proof of applicant self-attested. In case of partnership/ company, address proof of such firm/ company along with address proof of the authorized representative
  • 2 Passport size photographs of the applicant or authorized representative
  • Rent Deed/ Registry Copy of the registered office of firm or company
  • List of /Partners/ Directors / Members of Society/ Trust on letterhead of particular firm/ company/ trust
  • List of Equipment/ Machinery installed on the premises.
  • Partnership deed/ Affidavit of Proprietor/ MOA /AOA
  • NOC from the manufacturer, if the applicant is doing the business of relabeller/Repacker

Goods and Services Tax (GST) rates applicable for canteen business in India

Goods and Services Tax (GST) rate 5%, 12%, or 18% is applicable for food services in India. GST implementation has replaced the earlier VAT and service tax regime. VAT is charged on alcoholic beverages; VAT is a state-level tax. Goods and Services Tax (GST) will be applicable on food and non-alcoholic beverages and VAT will be charged on alcoholic beverages. Let us we will discuss the key rates applicable to GST on food services and products.

Key rates of Goods and Services Tax (GST) applicable on food services:

  • 5% GST applicable on food services which are provided by restaurants (both air-conditioned and non-air-conditioned).
  • 5% GST applicable on food/drink (non-alcoholic) served at canteen/cafeteria/mess operating on contract basis in the industrial unit, office, school, hostel, colleges etc.
  • 5% GST applicable on meals/food services provided by Indian Railways/IRCTC or their licensees both on board trains and on platforms. 
  • 18% GST applicable on restaurant services with room service and takeaway provided by restaurants located within a hotel featuring room tariff over Rs. 7,500.
  • 18% GST applicable on food services with the delivery of food provided by a restaurant/food, which is jointly located within premises of a guest house, club, etc.
  • 18% GST applicable to outdoor catering services.

Conclusion

In conclusion, running a canteen business is exactly the same as running a small business. It is not an easy role, and seek financial management, operational management, and staff management. A canteen business is hard work and it takes a long time to establish a brand. A location, where the canteen is set up, controlling the cost of inputs and marketing are some of the important focus areas. Online business of canteen business is profitable. The presence of social media and management is also an important part of the canteen business.

If you are seeking help in setting up your canteen business, then contact the team of experts at Legal Window now.

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