INTRODUCTION
Cloud kitchens are also known as ghost kitchens, delivery-only Restaurants, virtual kitchens, dark kitchens, and commissary kitchens. Tlack any physical dining locations[1]. In this blog, we will look at the important legal requirements for cloud kitchens and explore tips on how to handle challenges effectively.
This legislation sets rules about food and creates the Food Safety and Standards Authority of India(FSSAI). Its goal is to establish science-based standards for food products and manage their production, storage, distribution, sale, and imports. This will help ensure safe and nutritious food for people, along with addressing related issues.[2] I
LICENSING AND PERMITS
- The FSSAI is an essential license under the Food Safety Law. Possession of this license serves as proof that you provide safe and hygienic food to your customers. Without a valid FSSAI registration, your cloud kitchen risks business closure, fines, and removal from online platforms.[3]
Process to obtain the License:
Depending on the expected annual turnover, determine whether you will need basic, state, or central registration.[4]
- Apply through the FoSCoS portal.
- Submit the required documents, such as the following:
ID
Kitchen layout
Food Safety Management Plan
Proof of address
- Applicable fees shall be paid, following which, an inspection will be conducted to check hygiene and safety standards for the state and central licenses.[5]
By holding a valid FSSAI license, you can avoid the risk of customer complaints about the food quality you provide[6]
- A Health and Trade license must be obtained for a cloud kitchen from the local municipal authority. This is to ensure that your kitchen activities comply with zoning ordinances, sanitation standards, and fire safety norms.[7]
- Fire safety NOC is To secure one, schedule a fire safety inspection by an accredited organization. After completing the inspection, submit the report and request a fire safety NOC from the local fire department.[8]
- The shops and commercial establishments coveredunder the Certificate under the Act must apply for registration under the respective state Act. It should be registered under the Act within the time period of 30 days of the commencement of business, and obtain the certificate.[9]
CONTRACT WITH DELIVERY PARTNERS
A contract between a cloud kitchen and a food delivery app in India is a legally binding service agreement governed by the Indian Contract Act,1872.[10] It should guarantee data protection, maintain privacy, and enforce cybersecurity protocols while clearly stating on their websites the kinds of information gathered and the reasons for collecting that information; otherwise, the company will be liable to compensate those impacted.[11] This contract includes the rights and obligations of both parties involved
The contract must include the following:
- The agreement should outline the parties involved (both the delivery application and the cloud kitchen).
- It should clearly specify the services to be rendered by each party.
- Explain the payment conditions, including commission percentages.
- Clarify the delivery terms, which encompass the delivery method, estimated delivery time, and delivery area of the product.
- Explicitly state the liability and how compensation will be provided.
- Clarify how the data will be shared and safeguarded.
Partnering with a third-party delivery service can be advantageous for your business in many ways. It can broaden your customer base and increase market opportunities while also helping in adherence to the food delivery laws, safeguarding your business from potential liabilities. The most popular platforms are Swiggy and Zomato.[12] As many operations shift to the digital realm, it is wise to implement electronic contracts and e-signatures for agreements with suppliers and partners.[13] This approach not only accelerates the process but also guarantees that you maintain a verifiable record of all your business dealings.[14]
TAXATION
GST registration involves obtaining a unique identification number (GSTIN) for a business liable to pay Goods and Services Tax (GST).[15] Although cloud kitchens have the benefit of lower overhead costs and flexible business operations, they are still subject to taxes, just like any traditional restaurant.[16].
GST is mandatory for every business that meets the criteria set by the tax authorities. The GST eligibility criteria for cloud kitchens vary based on business turnover, food items sold, and other factors. It is important for cloud kitchen operators to understand and comply with relevant tax regulations. [17]
If a cloud kitchen chooses to follow the composition scheme, the GST rate remains at 5% based on turnover (again without ITC benefits). When the cloud kitchen offers catering services for events, an 18% GST rate (9% CGST + 9% SGST) is applicable, provided these services are carried out at a venue owned or arranged by the client.
The documents needed for GST registration for an online cloud kitchen venture:
- Business PAN card
- Aadhaar card of the owner
- Documents for business registration
- Bank account information
- Proof of address for the business location
- Digital signatur[18]
INTELLECTUAL PROPERTY
Trademark registration: Protect your kitchen’s unique brand name and logo, as it is essential to stop rivals from imitating them. It is necessary for them it be registered under class 43 of the Trademarks Act.[19]
Trade secrets: The recipes, formulas, and unique methods of food preparation must be safeguarded by establishing strong confidentiality protocols, such as non-disclosure agreements, etc.
Copyrights: safeguarding original material such as websites, food photographs and menus, etc.[20]
DISPUTE RESOLUTION
Every issue that arises while working with a third party can put your business at risk, and that is why, for a cloud kitchen operator, effective dispute resolution is paramount.[21]
Consumer disputes: The resolution method for this could include prompt refunds, product replacements, apologies, and in-app dispute resolution for delivery-related issues.[22]
Logistics disputes: It’s important to establish clear contractual terms regarding quality, payment, and delivery. Alternatives such as negotiation, mediation, and arbitration can provide quicker resolutions compared to court proceedings.
EFFECT OF NON-COMPLIANCE
Financial Penalties: Regulatory authorities can impose fines, which may vary from ₹25,000 to over ₹10 lakh, depending on the nature of the violation.[23]
Business Closure: Operating cloud kitchens without essential licenses may result in suspension or orders for permanent closure issued by regulatory authorities.
Removal from Online Platforms: Food delivery services such as Swiggy and Zomato mandate a valid FSSAI license and other necessary documentation for partnership. Kitchens that do not possess them will be delisted.[24]
Confiscation of Equipment: Authorities may seize kitchen appliances in case of non-compliance with health and safety regulations.
Heightened Oversight: A record of non-compliance may result in more frequent and stringent inspections and audits by regulatory bodies in the future. Ultimately, complying with legal standards is essential not only to avoid penalties but also for the long-term viability and success of a cloud kitchen enterprise.
CONCLUSION
Unlike earlier times, cloud kitchens have become a significant part of the restaurant industry. Whether operating as a conventional restaurant or a virtual kitchen, adherence to legal regulations is essential to avoid potential issues in the future.[25] Necessary legal documents include an FSSAI license, health and trade licenses, a fire safety NOC, a shop and commercial establishment certificate, and GST compliance. Agreements between cloud kitchens and third parties must adhere to the Indian Contract Act, 1872. Additionally, kitchens are required to have an intellectual property rights (IPR) strategy and established dispute resolution mechanisms. Thus, by focusing on these legal aspects, cloud kitchens can build a strong foundation for growth and customer trust by delivering high-quality food and ensuring public health protection.
Author(s) Name: Catherine A (Kristu Jayanti College of Law)
References:
[1] Ashley Colpaart, ‘Everything You Need to Know About Cloud Kitchens (Aka. Ghost Kitchens’ (The Food Corridor, 27 February 2025) <https://www.thefoodcorridor.com/blog/everything-you-need-to-know-about-cloud-kitchens-ghost-kitchens/>accessed 7 Dec 2025.
[2] The Food Safety and Standards Act 2006
[3] Dhruvi, ‘FSSAI License for Cloud Kitchens in India- 2025 Compliance Guide’ (Ebizfiling, 22 November 2025) < https://ebizfiling.com/blog/fssai-license-cloud-kitchen-india-2025/ > accessed 7 December 2025.
[4] Food Safety and Standards (Licensing and Registration of Food Businesses) Regulation, 2011, s 2 (FSSR)
[5] Admin, ‘How to Start a Cloud Kitchen: Setup Cost, Requirements, Rules & Profitability?’ (Ficsi Blog – Ficsi Blog, 30 September, 2025) <https://www.ficsi.in/blog/how-to-start-a-cloud-kitchen-complete-guide/> accessed 7 December 2025.
[6] FSSR (n4).
[7] Ilms Academy, ‘How to Legally Set up Your Cloud Kitchen on Zomato and Swiggy’ (ILMS Academy, 07 March, 2025) <https://www.ilms.academy/blog/how-to-legally-set-up-your-cloud-kitchen-on-zomato-swiggy#step-4-trade-license-and-local-permits/ > accessed 7 December, 2025.
[8] ibid
[9] Mayashree Acharya, ‘Shop and Establishment Act Registration’ (Cleartax, 12 August , 2025) <https://cleartax.in/s/shop-establishment-act-registration >accessed 7 December, 2025.
[10] Indian Contract Act, 1872
[11] Information Technology Act, 2000.
[12] Alexa Figliuolo, ‘Benefits of Third-Party Food Delivery Apps | Cloud Kitchens’ (Cloud Kitchens, November 18, 2025) <https://cloudkitchens.com/blog/benefits-of-hiring-third-party-food-delivery-services> accessed 7 December, 2025.
[13] The IT Act 2000 (n11), ss 5, 10A.
[14] Ilms Academy (n7).
[15] Central Goods and Service Tax (CGST) Act 2017, s 24(ix).
[16]‘GST Registration and Tax Implications for Cloud Kitchens in India’(Kouzina FoodTech Blog, 21 July 2025)
<https://www.kouzinafoodtech.com/blog/gst-for-cloud-kitchen-registration> accessed 8 December, 2025
[17] Fssai license consultants, ‘GST Registration for Cloud Kitchen in India’ (FSSAI License Information Blog, 5 April, 2024) <https://fssaiindia.in/blog/gst-registration/gst-registration-for-cloud-kitchen-in-india/ >accessed 8 December, 2025.
[18] Fssai License Consultants (n17).
[19] Trademarks Act 1999, sch 4, class 43.
[20] Copyright Act 1957, s 13.
[21] ‘Resolving Disputes in Multi-Delivery App Restaurant Partnerships | SuperOrder’(Superorder Blog) <https://www.superorder.com/blog/resolving-disputes-in-multidelivery-app-restaurant-partnerships–superorder#:~:text=Staff%20Training%20and%20Protocols,Maintaining%20Positive%20Collaborations>
accessed 9 December, 2025.
[22] Consumer Protection Act 2019
[23] Ramachandran Baskaran, ‘FSSAI Penalties and FSSAI Penalty for Non-Compliance: A Complete Guide for Food Businesses’ (myFssai, 26 November, 2025) <https://myfssai.in/fssai-penalties-for-non-compliance-in-india/#:~:text=FAQ,food%20businesses%20avoid%20FSSAI%20penalties?> accessed 8 December, 2025.
[24] S.Mahadevan‘ FSSAI Directs Swiggy, Zomato and Others to Delist Non-Licensed Restaurants’(The News Minute, 23 July, 2018)<https://www.thenewsminute.com/atom/fssai-directs-swiggy-zomato-and-others-delist-non-licensed-restaurants-85229 > accessed 8 December, 2025.
[25]Ayush Verma, ‘Cloud Kitchens and Legal Compliance – iPleaders’ (iPleaders, October 15, 2020) <https://blog.ipleaders.in/cloud-kitchens-new-normal/#Conclusion>accessed 8 Dec, 2025.
