Business Plan for a Restaurant in India (2026): Licences, Setup Cost, GST and a Worked P&L

A restaurant business plan in India has two jobs. It has to convince a bank, a landlord or a partner that the idea works, and it has to convince you — before you sign a lease — that the numbers add up after rent, staff, food cost, GST and aggregator commissions. This guide walks through each part of a plan for a small or mid-size Indian restaurant in 2026: the format, the licences and their order, how GST really works for restaurants, a setup budget in ₹, staffing, Swiggy and Zomato maths, and a worked monthly P&L with a break-even you can test.

Quick answer

A good restaurant business plan covers the concept and location, licences (FSSAI, municipal health/trade licence, fire NOC, Shop & Establishment, GST, and an excise licence if you serve alcohol), a setup budget, staffing, pricing and a monthly P&L. Standalone restaurants charge 5% (no input tax credit); only restaurants in hotels with rooms above ₹7,500 a day charge 18% with ITC.

• Setup cost: roughly ₹15 lakh to ₹1.5 crore (industry estimates); our 40-seat tier-2 example is about ₹42 lakh

• FSSAI basic registration up to ₹1.5 crore turnover — fee ₹100/year

• Aggregator commission is often 18–30% of order value plus 18% GST (estimate, varies by contract)

• Break-even in our example: about 69 bills a day, or ₹7.6 lakh monthly sales

What a restaurant business plan should contain

Banks, investors and franchise partners in India expect broadly the same sections. Keep it short — 10 to 15 pages plus spreadsheets is plenty for a single outlet — but make every number traceable to a quote, a rent agreement or a stated assumption.

1. Summary. One page: concept, location, seats, investment, funding sought, expected monthly sales and break-even.
2. Concept and menu. Cuisine, price point, service style (quick service, casual dining, café, fine dining), and a draft menu with target food cost for each dish.
3. Location and market. Footfall, nearby offices or colleges, competitors within a kilometre, rent per sq ft, parking and delivery radius.
4. Licences and compliance. Which permits you need, from whom, and when — with the building's suitability confirmed.
5. Setup budget. Deposit, fit-out, equipment, furniture, licences, technology, launch marketing and working capital.
6. Operations and staffing. Opening hours, kitchen layout, staff roles, salaries and shift plan.
7. Sales channels. Dine-in, takeaway, aggregators, catering — with a planned mix.
8. Financials. Monthly P&L for the first year, cash flow, break-even and payback.
9. Funding. Own money, bank loan, scheme support, and repayment.
10. Risks. Licence delays, rent escalation, staff turnover, food inflation — and how you'll handle each.

If you want a ready structure, our business plan generator produces a draft you can fill with the numbers below.

Restaurant numbers at a glance (2026)

5% (no input tax credit)

GST on standalone restaurants

18% with ITC only in hotels with rooms over ₹7,500

₹100/year

FSSAI basic registration

Turnover up to ₹1.5 crore

₹42 lakh

Our 40-seat tier-2 setup estimate

Industry range ₹15 lakh–₹1.5 crore

5–10%

Typical net margin

Industry estimate

Licences and permits for a restaurant in India

Licences tied to the premises cause most delays, so confirm the building's land use and sanctioned plan allow a restaurant before you sign. A commercial unit with a ventilation route for the kitchen exhaust, adequate drainage and a fire exit is far easier to licence than a converted residence.

FSSAI. From 1 April 2026, food businesses with turnover up to ₹1.5 crore need only basic registration; above that, a state licence up to ₹50 crore. A 40-seat restaurant often starts under registration and moves to a state licence as sales grow. Apply on FoSCoS at the restaurant's address; our FSSAI registration guide has the steps.

Health trade or eating-house licence. This is the municipal permission to run an eating establishment. In Delhi it is the MCD Health Trade Licence, applied for online. Delhi used to require a separate eating-house licence from Delhi Police too; a June 2025 notification ended police licensing for eating houses, hotels and five other trades, and civic bodies now handle it. Other cities have their own versions and inspection checklists — drainage, ventilation, pest control and potable water are the usual focus.

Fire NOC. Rules depend on the state and the building. In Delhi, for example, the fire service has issued NOCs to restaurants with 50 or more seats, and the excise department requires one before granting a bar licence; a law firm's summary says larger premises need one irrespective of seats. Ask the local fire station before you finalise layout, because exits, extinguishers and the LPG bank are hard to change later.

Liquor. A bar licence comes from the state excise department and usually needs the trade licence, fire NOC and police or local-body clearances first. Fees and conditions vary so much between states that they should be a separate line in your plan. Alcohol is outside GST; it is taxed under state excise and VAT.

GST for restaurants: 5% without ITC vs 18% at specified premises

GST is where many restaurant plans go wrong, because the rate looks low but comes with a catch.

Standalone restaurants: 5% (no input tax credit). Dine-in, takeaway and delivery from a standalone restaurant are taxed at 5% — but without input tax credit. You cannot recover the GST you pay on rent, equipment, interiors, packaging, software or aggregator commission. In your plan, show those costs gross of GST, because the GST on them is a real cost.

Specified premises: 18% with ITC. Restaurants located in a hotel where any unit of accommodation was supplied at more than ₹7,500 a day charge 18% and can claim credit. Since the GST changes of September 2025, a standalone restaurant cannot opt into this route, so for almost every independent restaurant the rate is 5% without credit.

Aggregator orders. For orders through Swiggy, Zomato or any other e-commerce operator, the platform pays the 5% GST on the food under section 9(5) of the CGST Act, as CBIC's Circular 167/23/2021-GST explains. You don't charge GST on those orders, but they still count towards your aggregate turnover for registration.

Registration. You must register once aggregate turnover crosses ₹20 lakh (₹10 lakh in special category states). Most restaurants register at the start because landlords, aggregators and corporate customers ask for a GSTIN. See our GST registration guide.

Composition scheme. A small restaurant with turnover up to ₹1.5 crore can opt for composition at 5% of turnover, paid from its own pocket — it cannot charge GST on bills. Because the rate is the same 5% and there's no credit either way, composition mainly saves on paperwork. Whether a composition restaurant can sell through aggregators has been argued both ways since the 2022 change, so get written advice from a CA before choosing it if delivery matters to you.

Income tax on platform sales. Platforms deduct TDS of 0.1% on gross sales; claim it when you file your return.

Restaurant GST — the three situations

Situation	GST rate	Input tax credit	Who pays the tax
Standalone restaurant — dine-in, takeaway, own delivery	5% (no input tax credit)	No	You
Restaurant in a hotel with any room above ₹7,500/day	18% with ITC	Yes	You
Orders through Swiggy, Zomato or another platform	5% (no input tax credit)	No	The platform, under s.9(5)
Composition restaurant (turnover up to ₹1.5 crore)	5% of turnover	No	You, without charging customers

Standalone restaurant — dine-in, takeaway, own delivery

GST rate

5% (no input tax credit)

Input tax credit

No

Who pays the tax

You

Restaurant in a hotel with any room above ₹7,500/day

GST rate

18% with ITC

Input tax credit

Yes

Who pays the tax

You

Orders through Swiggy, Zomato or another platform

GST rate

5% (no input tax credit)

Input tax credit

No

Who pays the tax

The platform, under s.9(5)

Composition restaurant (turnover up to ₹1.5 crore)

GST rate

5% of turnover

Input tax credit

No

Who pays the tax

You, without charging customers

Setup cost: a worked ₹ budget

There is no official figure for what a restaurant costs to open in India. Industry guides put the range at roughly ₹15 lakh to ₹1.5 crore, with mid-size 40–60 seat restaurants commonly quoted above ₹40 lakh, kitchen equipment for 30–50 seats at ₹4–12 lakh, and licences and compliance at ₹1–2 lakh. The table below is our illustrative estimate for a 40-seat casual-dining restaurant of about 1,500 sq ft in a tier-2 city, built from those published ranges. Replace every line with quotes from your city.

Remember that GST paid on fit-out and equipment is not recoverable for a 5% restaurant — the figures above include it. A unit with Udyam registration can look at a Mudra loan for part of the equipment and working capital, and the startup cost calculator helps you build your own version of this table.

Staffing plan

A 40-seat casual-dining restaurant open for lunch and dinner typically needs 10 to 14 people. A realistic plan lists each role, shift and salary, and checks every salary against the state's minimum wage for that skill category — for example, our guides on minimum wages in Delhi and minimum wages in Haryana.

Our example uses 12 staff and a monthly wage bill of about ₹2,10,000: a head cook, two to three line cooks, a tandoor or specialist cook, two kitchen helpers and a dishwasher in the kitchen; a manager or captain and three or four stewards in front. Published salary bands from a restaurant-software firm in 2026 put kitchen staff at roughly ₹12,000–20,000 a month, stewards at ₹10,000–15,000 and managers at ₹40,000–60,000; metros pay more. Food and accommodation for staff, common in Indian restaurants, should appear as a separate cost line.

Plan for ESI and EPF registration once your headcount and wages bring you within those schemes, and for Shop and Establishment rules on working hours, weekly offs and overtime. Turnover of kitchen staff is high, so a written recipe book with portion sizes keeps quality stable when people change.

From plan to opening day

1. 1

   Lock the concept and location

   Pick cuisine, price point and seat count. Check land use, the sanctioned plan, exhaust route and parking before you negotiate rent.

   Tip: Ask for a rent-free fit-out period of 1–3 months in the lease.

2. 2

   Register the business

   Proprietorship, partnership or LLP; PAN, current account, free Udyam registration and GST.

3. 3

   Apply for FSSAI, trade licence and fire NOC

   FSSAI on FoSCoS; trade licence on the municipal portal; fire NOC where required. Excise licence last, if you serve alcohol.

   Open FoSCoS
4. 4

   Fit out and hire

   Kitchen and dining fit-out usually takes 6–10 weeks. Hire the head cook early so the kitchen layout matches the menu.

5. 5

   Cost the menu and soft-launch

   Cost every dish, run a soft launch for friends and nearby offices, then list on aggregators.

Swiggy and Zomato: aggregator economics

Aggregators can fill empty afternoons and reach people who will never walk in, but each order costs far more to serve than a dine-in bill. Swiggy and Zomato don't publish a standard commission; it is negotiated per contract and varies with city, volume and whether the platform delivers. Industry write-ups in 2026 report independent restaurants paying roughly 22–30% per order, with large chains paying less. Ads, discounts you fund and 18% GST on all platform fees come on top — and because a 5% restaurant gets no input tax credit, that GST is a cost.

On a ₹400 delivery order (menu price before GST), our example keeps:

• Food cost at 32%: −₹128
• Packaging: −₹25
• Commission at 25% (estimate): −₹100
• GST at 18% on commission: −₹18
• Contribution: about ₹129, or 32% of the menu price

The same ₹400 eaten in the restaurant contributes about ₹272 after food cost, less a small card or UPI charge. That gap is why many restaurants keep delivery menus 10–20% dearer than dine-in, limit discounts, and use packaging inserts to bring regular customers to direct orders. If you want to run delivery-only, read our guide on how to start a cloud kitchen.

Worked monthly P&L and break-even

Here is a monthly P&L for the 40-seat example once it has settled, about six months after opening. All figures are menu prices before GST, because the 5% GST you collect is passed to the government and the platform pays it on delivery orders. Every number is an assumption to replace with your own.

Sales

• Dine-in: 60 covers a day × ₹350 average × 30 days = ₹6,30,000
• Delivery: 25 orders a day × ₹400 × 30 days = ₹3,00,000
• Total sales: ₹9,30,000

Variable costs

• Food cost at 32% of sales: ₹2,97,600
• Delivery packaging (750 × ₹25): ₹18,750
• Aggregator commission at 25% of delivery sales: ₹75,000
• GST at 18% on commission: ₹13,500
• Card and UPI charges (estimate): ₹5,000
• Contribution: ₹5,20,150 (about 56% of sales)

Fixed costs

• Rent: ₹1,00,000
• Salaries (12 staff): ₹2,10,000
• Power, LPG and water: ₹65,000
• Marketing and ads: ₹25,000
• Maintenance, pest control, software, accounting: ₹20,000
• Licence renewals and insurance (monthly share): ₹5,000
• Total fixed: ₹4,25,000

Operating profit: ₹95,150 a month, about 10% of sales, before depreciation, interest, the owner's salary and income tax. Spreading ₹30 lakh of fit-out and equipment over five years is ₹50,000 a month of depreciation, so the accounting profit is closer to ₹45,000. At this level the ₹42 lakh investment takes more than three and a half years to recover from operating profit alone — which is why the levers matter.

Break-even. Sales of ₹9,30,000 come from about 2,550 bills (1,800 dine-in covers and 750 orders), an average of about ₹365 a bill with roughly ₹161 of variable cost. Each bill therefore contributes about ₹204. Fixed costs of ₹4,25,000 ÷ ₹204 ≈ 2,084 bills a month — about 69 a day, or roughly ₹7.6 lakh in monthly sales. Try your own numbers:

Try it — restaurant break-even

Monthly Fixed CostsSelling Price per UnitVariable Cost per Unit

Contribution Margin / Unit₹204.00

Contribution Margin Ratio55.89%

Break-Even Revenue₹7,60,416.67

Break-Even Units2,084

Open the full Break Even Calculator (PDF, save, compare)

The levers. A two-point cut in food cost adds about ₹18,600 a month. Ten more covers a day at ₹350 adds about ₹1,05,000 in monthly sales and roughly ₹71,000 in contribution. Negotiating rent down by ₹10,000 goes straight to profit. Moving 100 delivery orders a month from an aggregator to direct ordering saves about ₹11,800 in commission and GST. None of these is dramatic alone; together they decide whether a restaurant survives its second year. Use the food cost calculator and the menu profitability checker dish by dish.

Mistakes that sink new restaurant plans

1. Signing the lease before checking licences. A building without commercial land use, an exhaust route or a fire exit can make the trade licence or fire NOC impossible.
2. Forgetting that GST is a cost. At 5% (no input tax credit) without credit, GST on rent, fit-out and commissions is money you won't get back.
3. Under-budgeting working capital. Most new restaurants run below break-even for months. Two to three months of fixed costs in the bank is a minimum.
4. Too big a menu. Every extra item adds stock, waste and training. Start with 30–40 dishes you can cook consistently.
5. Pricing delivery like dine-in. At 25% commission plus GST and packaging, a dine-in price can lose money on delivery.
6. Paying below minimum wage. States revise rates, sometimes sharply — check your state's latest order before you fix salaries.
7. No plan for the excise licence. If alcohol is central to the concept, the licence's timing and cost should drive the whole schedule.

Official links

• FoSCoS — FSSAI registration and licenceApply, pay fee, download certificate
• FSSAI order on revised turnover thresholds (13 March 2026)
• CBIC Circular 167/23/2021-GST — restaurant services through e-commerce operators
• GST Council 56th meeting recommendations
• GST registration portalFree registration
• MCD Health Trade Licence (Delhi example)

What to do next

Start with the location: confirm the trade licence and fire NOC are possible for the unit you like, then build your P&L with real rent and salary figures. Cost the menu with the food cost calculator, test volumes with the break-even calculator, and apply for FSSAI registration as soon as the lease is signed.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

How much does it cost to open a restaurant in India?

There is no official figure. Industry guides put a small to mid-size restaurant at roughly ₹15 lakh to ₹1.5 crore depending on city, size and format. Our worked estimate for a 40-seat casual-dining restaurant of about 1,500 sq ft in a tier-2 city comes to about ₹42 lakh, including a six-month rent deposit, fit-out, kitchen equipment, licences and two months of working capital.

Which licences are needed to open a restaurant in India?

At minimum: FSSAI registration or licence, a municipal health or trade licence (often called an eating-house licence), Shop and Establishment registration, and GST registration once turnover crosses ₹20 lakh or if you sell through aggregators and choose to register earlier. Depending on your state and building you also need a fire NOC, signage permission, and a liquor licence from the state excise department if you serve alcohol.

What is the GST rate for restaurants in India?

Standalone restaurants, including takeaway and delivery, charge 5% (no input tax credit). Restaurants inside hotels where any room is priced above ₹7,500 a day charge 18% with ITC. A standalone restaurant cannot opt for the 18% route. Alcohol is outside GST and taxed under state VAT.

What profit margin does a restaurant make in India?

Industry write-ups commonly cite net margins of about 5–10% for restaurants that run well. In our worked example, a 40-seat restaurant with ₹9.3 lakh monthly sales earns about ₹95,000 before depreciation, the owner's salary and income tax — roughly 10%. Food cost, rent and staff cost decide most of the result.

How many customers does a restaurant need to break even?

It depends on your fixed costs and how much each bill contributes. In our example, monthly fixed costs of ₹4.25 lakh and about ₹204 contribution per bill mean break-even at roughly 2,084 bills a month, about 69 a day, or about ₹7.6 lakh in monthly sales. Use the break-even calculator with your own numbers.

Should a new restaurant list on Swiggy and Zomato?

Usually yes, for reach, but price for it. Commission is negotiated per contract and commonly reported at 18–30% of order value, with 18% GST on top that a restaurant cannot claim back. The platform pays the 5% (no input tax credit) GST on the food. Keep delivery as a share of sales you can afford, and push repeat customers to direct orders.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 7 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.Circular No. 167/23/2021-GST — restaurant services through e-commerce operators — CBIC · accessed 7 October 2026
2. 2.Recommendations of the 56th meeting of the GST Council (3 September 2025) — GST Council / PIB · accessed 7 October 2026
3. 3.FSSAI order dated 13 March 2026 — revised turnover thresholds — FSSAI · accessed 7 October 2026
4. 4.Health Trade Licence — eating establishments (online application) — Municipal Corporation of Delhi · accessed 7 October 2026
5. 5.Seven businesses in Delhi no longer need police licence — ETV Bharat · accessed 7 October 2026
6. 6.Delhi drops police licence rule for hotels and eateries — Asian Hospitality · accessed 7 October 2026
7. 7.NOC from Fire Services Department — additional compliance for restaurants — S.S. Rana & Co. · accessed 7 October 2026
8. 8.How much does it cost to open a restaurant in India? (2026 update) — Restroworks · accessed 7 October 2026
9. 9.What Swiggy and Zomato really cost restaurants (2026) — DineHere · accessed 7 October 2026