Consent to Operate Certificate for setting up a hotel business in India

Enterclimate

10 Oct, 2022

Setting up the hotel business is a very lucrative option, having a market overview with the average operating margin rising by 200 basis points to 25.9%. However, the price is paid mainly by the environment for this profitability. The hotel industries contribute 2% of the total 5% of global CO2 emission by the tourism industry. 75% of the total environmental impact caused is by the hotel business due to the excessive use and wastage of resources. Consent to Operate Certificate was the need of the hour to combat the problem.

Therefore, as per the new guidelines, the Central Pollution Control Board (CPCB)mandated that hotels obtain a Certificate to Operate (CTO) Certificate. The objective was to curb the environmental impact and pollution caused by the hotel business in India. A CTO certificate can be obtained from State Pollution Control Board (SPCB)/Pollution Control Committee (PCC) to review and scrutinise environmental protection mechanisms and waste management.

Pre-requisite for setting up Hotel Business in India

Before getting a Consent to Operate Certificate for setting up a hotel in India, business owners have to consider some essential points, including: –

1. Thorough research about the market climate
2. Location and type of hotel business in India
3. Area required for hotel business
4. Financial and funding plan for the hotel
5. Planning human resource requirements of the hotel
6. Logistic services for setting up the hotel business

Licenses and permits required to set up Hotel Business in India

Due to the effect of setting up a hotel business on development, revenue and environment, business owners must obtain various licenses and permits. These licenses and permits, including the Consent to Operate Certificate for setting up a hotel in India, are to be obtained from various authorities before setting up a hotel or after starting its operation. The different types of licenses depending on the hotel type, star rating, location and amenities it plans to offer.

Some of the licenses that hotel businesses require to operate are: –

1. Building Permit– Hotel businesses need to obtain an authorised building permit by the relevant laws, including the Town Planning Act, Development Act or Municipal Act.
2. Fire NOC– To avoid any fire mishap, the business owner must obtain a certificate from the Fire Department in the form of a Fire NOC, which checks the essential fire safety measures.
3. Health Trade License– Municipal Corporation issues this license. The pre-requisite conditions for a health trade license include compliance with applicable hygiene and safety standards.
4. ESI Registration– Any hotel business that employs ten or more employees must obtain an Employee’s State Insurance (ESI) registration. This is in addition to obtaining a Consent to Operate Certificate for setting up a hotel in India.
5. Police License for Hotel– A hotel also requires a NOC from a Police or Police License, usually granted by the Commissioner or Additional Commissioner of the Police.
6. FSSAI Food Business License– For operating restaurants in a hotel, a business owner must acquire the FSSAI Food Business license regulated by Food Safety and Standard Act. The license is usually provided for one year.
7. GST Registration– As per GST law, every eligible company or business is required to acquire GST registration.
8. NOC from the Ministry of Tourism– For proper functioning and registration, the hotel business must get a No Objection Certificate (NOC) from the Ministry of Tourism.
9. Consent Certificates from CPCB/SPCB or PCC– To regulate the pollution caused by the establishment, Consent to Establish and Consent to Operate Certificateforsetting up a hotel in India from the CPCB/SPCB or PCC are required.

Other licenses required by hotel businesses include a Signage license, Business registration license, bar license, Certificate of Environment clearance, lift clearance and OSP registration. The hotel business must also comply with the IT Act 2000 and Registration under SARAI Act^[1].

Consent to Operate Certificate for setting up a hotel in India

As mentioned above, hotel businesses must acquire various licenses and permissions to operate in India. One of these licenses/permissions is the Consent to Operate Certificate, which must be obtained mandatorily before the hotel is operational.   

The concerned pollution Control Board grants a Consent to Operate Certificate for setting up a hotel in India once the devices are installed. It must comprise the Pollution Control Mechanism regarding the proper treatment of polluted water generated from the various facilities in the hotel like solid waste, sullage and sewage.

The distribution of authority for granting Consent to OperateCertificate for setting up a hotel business in India is divided as per: –

1. Up to 25 rooms: Authorisation granted by the Assistant Environmental Engineer/Environmental Engineer
2. Up to 50 rooms: Authorisation granted by the Senior Environmental Engineer
3. Above 50 rooms: Authorisation granted by Member Secretary

The process to acquire Consent to Operate from PCB

The Air and Water Acts governs the authorisation process for consent to Operate a Certificate for setting up a hotel business in India. Such consent certificate is regulated and granted by the CPCB and SPCB/PCC. In the stipulated guidelines published by Central Pollution Control Board, the industries are divided into red, Orange, Green, and White. These are divided according to their Pollution Index level. White category industries are not obligated to obtain a Consent to Operate Certificate. Because of the pollution caused by hotel businesses, they are categorised under the Red Category Industries with a PI of 60 and above.

Procedure to Obtain Consent to Operate Certificate for setting up a hotel in India

The process of obtaining a Consent to Operate Certificate for setting up a hotel in India includes the following steps: –

• The hotel business owner has to apply 30 days in advance before starting its operation.
• The application is submitted using OCMMS (Online Consent Management and Monitoring System). Following the completion of the application process, including the submission of documents and applicable fees, the authorised personnel of the authority scrutinises the establishment under the regulations imposed.
• After the site assessment, a report is framed by the authority for evaluation. If the information indicates that all the guidelines are being fulfilled, then the Consent to Operate Certificate is authorised.

List of Documents for Consent to Operate Certificate (CTO) for Hotel Business in India

1. Application for consent certificate under Section 25 of the Water Act, 1974
2. Application for consent certificate under section 21 of the Air (Prevention and Control of Pollution) Act, 1981
3. Application for registration under the Hazardous Waste Management Rules, 2016
4. Copy of completion/authorised certificate from Competent Authority
5. Compliance report regarding the Certificate to Establish (CTE)
6. Consent certificate fees are regulated by SPCB regulated under Water and Air Acts

Renewal process regarding Consent to Operate Certificate (CTO) for setting up a hotel in India from PCB

The validity period of a Consent to Establish certificate is one year. Every owner must renew his/her consent to Operate Certificate (CTO) to set up a hotel in India. The renewal period is determined by the type and size of the hotel business. To guarantee that firms adhere to the established criteria and compliance norms for discharging effluents/solid waste or emissions, authorities have made the renewal process mandatory. The authority granting the renewal certificate is the same authority that grants the Consent to Operate the Certificate. 

List of Documents for renewal of Consent to Operate (CTO) Certificate for Hotel Business in India

1. A self-attested affidavit detailing the status quo of process, design, and hotel
2. Performance report of Pollution Control Device
3. Renewal ‘Consent Fees’ approved by Pollution Control Board (PCB)
4. Copy of authorisation from Tourism Department
5. Renewal application from Hazardous Waste (Management and Handling), Rules
6. Environment statement form
7. Annual Return Form under Hazardous Waste (Management and Handling), Rules

Conclusion

While economic development is considered one of the most important tasks in today’s world, it is also essential to acknowledge that it should not happen at the cost of the environment. One of the key contributors to economic growth as well as environmental damage is the hotel industry. Hence, to ensure that the hotel industry takes all the proper measures to ensure sustainable business, it is very important that the Consent to Operate (CTO) Certificate for Hotel Businesses in India is acquired by owners from state authorities to monitor and regulate their activities regularly.

Read our Article: Consent to Operate vs Consent to Establish from Pollution Control Board