Legal Permissions for starting a home made food business in India

Have an internet connection? If yes, then you can now you can turn your home into a restaurant by selling food to millions from your doorstep! Well, like all other things, eCommerce also gives you an opportunity to start your home-based food selling business. Therefore, if you are skilled at cooking, you can now turn your hobby into a lucrative business. Cater to the broad market of foodies in your area and make money for yourselves.

These kinds of businesses are ideal for homemakers, retired personnel, students, professionals who wish to earn some extra bucks by selling homemade food products and items or even those who want to feed others with their delicious food. And all that from the comforts of your sweet home!

eCommerce has become a reliable medium of trade along with transparent communication, and you can bank on this property to get high returns and profit. You need to have a keen sense of business, frame appropriate strategies, and have the will to take different initiatives. Once you can get the first part right, you can quickly think about starting a home-based business for food selling.

Introduction to Homemade Food Selling

The government of India on 23rd August 2006 gave his permission to act to join all the laws related to food and to establish the Food Safety and Standards Authority of India (FSSAI). That will make the standards based on science for the food items and will regulate the manufacture, storage, distribution, sale, and import, in order to make sure that safe food available for human consumption, it will also deal with all issues related with food.

When a person is commencing a business of homemade food then it is compulsory to have some licenses and certification as selling food from home is equal to selling food in a restaurant. So, one can start registering for various general licenses or permits from the local Food and Health Department.

To secure your personal assets such as your home, consider creating a business entity such as a limited liability company, Sole Proprietorship, Private Limited Company, etc. It is very quick and easy to get it done. One should compare and understand the pros and cons of both business entities properly.

Also, it is very important for the service provider to follow the Health Department rules and regulations. Before starting your business contact the local Health Department for specific regulations, certifications, licenses, and insurance information in your area. The Health Department checks the area which is going to be used as the kitchen for the preparation of Homemade food.

Food License for Homemade Food Selling

You need a food license from FSSAI to sell homemade food but if it is a small scale, only registration is required. Homemade food or Hotel food each and every Food Business Operator (FBO) is required to either register or get a Food License. As per Food Safety and  Security act, 2006 every FBO is required to obtain an FSSAI Food License. If the FBO is tiny or small it only requires to register itself with FSSAI. Obtaining Registration or License depends upon the annual turnover of the FBO.

• Below 12 Lakhs – Registration FORM A
• 12 – 20 Lakhs – State License FORM B
• Above 20 Lakhs -Central License FORM B
• FBO must be registered.
• One additional Central License for Head Office is necessary if Food Business Operator is operating in more than 1 state,
• Importers can take a single central license at their Import Export Code address.
• Food Business Operator must obey the rules and conditions of registration.
• One presumption with various types of businesses is eligible for one registration.

Need for FSSAI License

• It facilitates trade and makes sure there is no compromise on consumer safety & a larger share.
• The high degree of consumer confidence in the safety & quality of food is there.
• It also helps in the removal of multiple regulations.
• It also helps to promote innovation in food products.

Documents Required for FSSAI License

• Duly filled and signed Form A 
• 2 Passport Size Photographs
• PAN Card of the owner
• Proof of Address of the business premises
• Partnership Deed/ Incorporation Certificate / Articles or Memorandum of Association
• List of food items 
• Declaration form
• Authority letter
• Form IX: Board Resolution

Other Important Licenses required for homemade food business

Other licenses/permissions you require for starting a homemade food business may differ from state to state:

• Registration under the Shops and Establishments Act: A food business has to enroll under this Act of the State in where its business is established.
• Health Trade License: A health trade license permits a business to trade in any items or services which have a direct impact on public health. This license is given by the Municipal Corporation or the health department of the State.
• Liquor License: If the business wants to serve alcohol within its premises, then it requires to apply for a liquor license and get it from the local Excise Commissioner. They grant this license to any food business that wishes to serve any drinks containing liquor.
• Eating House License: This license is needed for any business where the common public is allowed and any sort of food or drink is served for the public’s consumption. An eating-house license can be taken from the State Police Commissioner.
• Environmental Clearance: This license can be taken from the State or City Pollution Board. This license is given once the authority estimates the reach and impact of the business on the environment.
• Signage License: A signage license allows a food business to promote it by inserting up any words, signs or pictures. Your food business is required to apply to the local Municipal body.

Validity Time For FSSAI Licence- Homemade Food Selling

FSSAI license validity stretches out from 1 to 5 years. According to the FSSAI rules, the homemade food selling operator ( FBOs) needs to apply for the renewal of the license in 30 days and it should be done before its expiry. Any FSSAI renewal application filed exceeding the expiry date is needed to pay a late fee of Rs. 100 per day for each day of delay. So, it’s essential for all home food selling operators to track and ensure that the FSSAI license is valid at every time.

Penalties for not registering the for FSSAI Licence 

If an FBO is found Non-Compliant with the terms of the FSSAI, it will get punished. The penalty structure is regular and applies to everyone. A few FSSAI penalties for a non-compliant FBO are listed here:

• If the FBO is running the operations without applying for the Food Safety certificate, this is punishable under the Act. The FBO may face imprisonment or a fine of up to Rs. 5 lakhs and even both of them.
• If a business is selling sub-standard quality food items, it may be punished for up to Rs. 5 lakhs. And the person responsible for selling, either himself or by a person working on his behalf, would be held responsible.
• The FBO selling misbranded goods, either himself or by a person acting on his behalf, may get penalized by an amount up to Rs. 3 lakh.
• For all the entities selling, packing, storage, distributions or importing of Food Items containing extra or exotic substance, a fine of Rs. 1 lakh may be levied.

In extreme conflicts, where death has occurred due to consumption of that particular Food Item, the penalty to the responsible FBO may extend to Rs. 5 lakh or even imprisonment, depending upon the severity of the situation and how much harm has been caused.

Final Thoughts

Last but not the least; you need to comply with all the necessary government regulations related to the food business. Procure any necessary food licenses and provide information about them on your website. This way you can win the trust of your customers as they know the item follows the food standards and norms laid by the government.

For more information, reach out to experts at Legal Window.