We urgently need to curtail and reduce all formalities, consents and permissions by repealing or  changing existing relevant laws on hotels, restaurants, bars and pubs, mostly framed by state governments

Service based establishments like hotels, restaurants, resorts and bars are of immense importance for the Indian economy and many micro economies around the country, in terms of providing facilities to Indian and foreign tourists and guests, contributions to government revenues, employment and earnings of foreign exchange. But setting up a hotel or a one of these establishments is among the most cumbersome, time consuming and expensive procedures, in terms of number of consents, licences and registrations required and number of taxes involved :-

 Licences, consents and registrations required

• Blue print of the site plan and Sanction of building plan.
• Permission from local police and fire department.
• NOC from chief medical officer and approval of water lines and sewerage and Clearance from director of industrial safety and health.
• Consent for water and air pollution and approval of garbage
disposal and sewerage.
• Licence for power and electrical installations.
• Trade licence and Registration with shops & establishment dept.
• Licence to play music in rooms, common areas and on special   events.
• Bar licence from state excise authorities.
• Restricted money changers licence
• Sanction of LPG and furnace and Calibration of weights and      Measurements
• Food handler’s licence and nomination under food adulteration act.
• Permission to open parlours and saloons within hotel.
• Obtaining Hotel star classification from central government
• License for installing and operating lifts.
    
Tax registrations and formalities:

• Registration with state excise authorities with numerous formalities, records and filing of returns for storing and serving liquor.
• Registration for state VAT, Service tax and Luxury tax
• PAN and TAN number
• Registration with PF. Dept. And Registration with ESI
• Trade licence.

NOTE: almost every consent, permission, registration and licence has official and 'unofficial' fees.

Ironically no rule or restrictions or any other formality applies to food cooked and sold on pavements and streets, other than some pay-offs to local officials.

In search of solutions:

The ministry of tourism of every state government  should set up a separate department to provide a single window facility to the entrepreneurs for granting one single consolidated licence for opening a new hotel, restaurant, bar or pub by coordinating with various agencies after taking all necessary information /clarifications / supporting documents from the applicant; and by charging a single lump sum licence fees and such licence should replace all existing licences, consents and permissions. This should be renewable once in three years upon payment of renewal fees, review and inspection. The single window should also have the responsibility of registration of the applicant with various tax departments under one roof.

There is an urgent need to curtail and reduce the formalities, consents and permissions by repealing/ changing the existing relevant laws on hotels, restaurants, bars and Pubs mostly framed by state governments.

You may also want to read...

Building a Better India-Part1: How to create a smaller and smarter government
 
Building a Better India-Part2: Transforming political landscape
 
Building a Better India – Part 3: Bringing systemic changes in constitutional bodies
 
Building a Better India – Part 4: Identifying tax issues
 
Building a Better India – Part 5: Bringing tax reforms

Building a Better India – Part 6: Fast track clearances

Building a Better India – Part 7: Managing India's Deficit

Building a Better India – Part 8: Boosting Coal Production

(Kolkata-based Dalbir Chhibbar practised as a CA till 1990 and later started his own buinsess)