Food Business in India is one of the most lucrative and trending businesses right now. In this digital era, anyone can order food anytime anywhere. People are enjoying their meal at doorstep using online food portals. This is how the food sector has experienced tremendous growth in the past couple of years with the introduction of several new food joints. But before starting a food business, it is imperative to follow a set of guidelines in order to carry out food services and sell food products. Failure to do so, one may land up with unnecessary legal hindrances.
Food License Every food business owner including a petty vendor/ hawker needs to obtain a Food license from FSSAI. FSSAI stands for the Food Safety and Standards Authority of India.
Types of FSSAI Registration
FSSAI registration is based on the business types, turnover and capacity of production. Depending upon the installed capacity and turnover, FBOs are eligible for license such as basic license, central license, and state license.
- FSSAI Basic Registration– FBOs having a turnover of less than Rs.12 lakh p.a must obtain FSSAI basic registration. The FSSAI registration form that the applicant has to fill to obtain FSSAI basic registration is Form A.
- FSSAI State License – FBOs having a turnover of more than Rs.12 lakh p.a and less than Rs.20 crore p.a must obtain the FSSAI state license. The FSSAI registration form that the applicant has to fill to obtain an FSSAI state license is Form B.
- FSSAI Central License– FBOs having a turnover of more than Rs.20 crore p.a must obtain the FSSAI central license. The FSSAI registration form that the applicant has to fill to obtain FSSAI central license is Form B.
FSSAI Registration Eligibility
FSSAI Registration is a basic license and it is required for all the FBOs involved in the small-scale food business. This category covers the following businesses:
- Any FBO with an annual turnover of not more than Rs. 12 lakh.
- Petty retailer dealing in food products.
- Any person who manufactures or sells any food article by himself.
- Food sale is done by the temporary stall holder.
- Any individual who distributes food in any religious or social gathering except a caterer.
- Small-scale or cottage industries dealing in the food business.
- Small businesses having the following food capacity limits.
| Sl.No | Business | Capacity |
| 1 | Food production (other than milk and meat) | Up to 100 kg/ltr per day |
| 2 | Procurement, handling and collection of milk | Up to 500 ltr per day |
| 3 | Slaughtering | 2 large animals or 10 small animals or 50 poultry birds per day or less |
| 4 | Transportation | Single vehicle |
| 5 | Vending machine | Up to 12 vending machines in only one state/UT |
FSSAI License Eligibility
For all other FBOs apart from small-scale businesses, the FSSAI license has to be obtained. FSSAI License can be classified into two categories i.e. State FSSAI License and Central FSSAI License based on the size of the business whether it is a medium scale or large scale business.
State FSSAI License
- FBO with medium-sized manufacturing units, transporters, marketers, traders, etc., need to take State FSSAI registration from the State Government. This category covers the following businesses:
- FBO’s must have a turnover between Rs 12 lakh to Rs 20 crore (Rs 30 crore in case of transportation business and wholesaler)
- All grains, cereals, pulses milling units without any limit on production capacity
- Medium-scale businesses having the following food capacity limits:
| Sl.No | Business | Capacity |
| 1 | Food production (other than milk and meat) | 1 MT to 2MT per day |
| 2 | Procurement, handling and collection of milk | 501 to 50,000 ltr per day |
| 3 | Slaughtering | 3-50 large animals or 11-150 small animals or 51-1,000 poultry birds per day |
| 4 | Storage | Up to 10,000 MT |
| 5 | Transportation | 100 vehicles |
| 6 | Hotel | One, Two, Three and Four star rating |
| 7 | Vending machine | Up to 100 vending machines in only one state/UT |
The tenure of the license issued is a maximum of 5 years and a minimum of 1 year.
Central FSSAI License
FBOs who are large manufacturers, importers and exporters dealing in large-scale food businesses need to obtain Central FSSAI registration from the Central Government. This category covers the following businesses:
- FBO’s must have a turnover above Rs 20 crore (Rs 30 crore in case of transportation business and wholesaler)
- Following FBOs irrespective of turnover or size of business:
- Food businesses operating in two or more states.
- Importers and exporters.
- Proprietary food and Non-specified food.
- Food or health supplements and Nutraceuticals.
- Radiation processing of foods.
- Food Business Activities at premises of Central Govt Agencies
- Caterers, restaurants, canteens, hawkers or petty retailers at the premises of railway stations
- E-commerce food business
- Large-scale businesses having the following food capacity limits:
| Sl.No | Business | Capacity |
| 1 | Food production (other than milk and meat) | More than 2MT per day |
| 2 | Procurement, handling and collection of milk | More than 50,000 ltr per day |
| 3 | Slaughtering | More than 50 large animals or more than 150 small animals or more than 1,000 poultry birds per day |
| 4 | Storage | More than 10,000 MT |
| 5 | Transportation | More than 100 vehicles |
| 6 | Hotel | Five star and above rating |
| 7 | Vending machine | More than 100 vending machines located in two or more states/UTs |
The tenure of the license issued is a maximum of 5 years and a minimum of 1 year.
Here are some key reasons why a food license is required:
- Food Safety Standards : Governments set food safety standards to ensure that food prepared and sold to the public is safe to consume. These standards include guidelines on food handling, storage, preparation, and hygiene practices. A food license ensures that businesses comply with these standards.
- Consumer Protection : Food licenses help protect consumers from foodborne illnesses and other health hazards that can arise from improperly handled or prepared food. Businesses must demonstrate compliance with health and safety regulations to obtain and maintain a food license.
- Regulatory Compliance : Food licenses are a way for regulatory authorities to monitor and regulate food businesses effectively. By requiring businesses to obtain a license, authorities can inspect premises, review food handling practices, and enforce regulations to maintain public health standards.
- Traceability and Accountability : Having a food license enhances traceability in the food supply chain. It allows authorities to track where food products come from and ensures accountability in case of food safety incidents or outbreaks.
- Legal Requirement : In many jurisdictions, obtaining a food license is a legal requirement for operating a food business. Operating without a license can lead to fines, closure of the business, or other legal consequences.
Overall, a food license serves as a mechanism to protect both consumers and businesses by ensuring that food is prepared and sold in a safe and hygienic manner, in compliance with established health regulations.
Consequences of Non-Compliance
Any registered or licensed person under the FSSAI has to adhere to the rules and regulation under the FSS Act, 2006. Food safety officer generally conducts the inspection of the food business operator’s facility and identifies the level of compliance with the regulation using a checklist. Based on the compliance level, the food safety officer marks it as:
- Compliance (C)
- Non-compliance (NC)
- Partial compliance (PC)
- Not applicable/Not observed (NA)
Based on the above, the food safety officer might issue an improvement notice where ever required per Section 32 of the FSS Act, 2006. If the business operator fails to comply with the improvement notice, the officer after giving the licensee an opportunity to show cause may cancel his license. Any food business operator aggrieved by an improvement notice can appeal to the State Commissioner of Food Safety. The decision thereon can be challenged through appealing to the Food Safety Appellate Tribunal/High Court.
List of Punishable Offences Under the FSSAI Act
The following are the offences that are punishable under the FSSAI:
- Food that is of poor quality is being sold or manufactured.
- Food product misbranding
- Inaccurate information and advertising
- Additives in the food that aren’t required without a license, you can’t run a business.
- Failure to follow food safety standards and the Food Safety Officer’s instructions
- Conditions in the producing or processing units are unsanitary.
- Any Infractions possession of adulterant
- Hazardous product
- False information dissemination
- Interference from confiscated items
- Obstruction of a food safety officer or Impersonation of a food safety officer
- Penalties for repeat offences
- Import/export of food products in violation of provisions of the Food Safety and Standards Act
Penalties for being non-compliant under the FSSAI:
Every business needs to be compliant with the laws and guidelines of the concerned authority and government. The food business needs to be compliant as it has the health of humans on its brink.
Penalties Under FSSAI
- Selling/manufacturing sub-standard food: Any enterprise selling or manufacturing any food product, whether by themselves or on behalf of the seller/manufacturer, will be fined up to ₹5 lakh rupees if they store, distribute, or manufacture any article of consumable food product that is of sub-standard quality.
- Misbranding of food products: Any business selling or manufacturing food products, whether by themselves or on behalf of the seller/manufacturer, for storage, selling, or distributing a food product that is found to be misbranded, will be fined ₹3 lakh. In such cases, the adjudicating officer has the authority to order the guilty person to take corrective action.
- Misleading information and advertising: Any individual or business that deceptively describes a product or misleads consumers about the product’s quality or results will be fined ₹10 lakh.
- Unnecessary ingredients in food: Any food item that contains extraneous elements and is sold, stored, or distributed will be fined up to ₹1 lakh. Only the required additives and a proper composition should be present in the product.
- Operating a business without a license: Any food business operator who tries to run a business without a proper FSSAI license either directly or through someone acting on their behalf will be fined up to ₹5 lakh and imprisoned for up to six months. According to Subsection 2, section 31, some business owners are exempt from the mandatory licensing requirements.
- Failing to comply with Food Safety regulations and directions of the Food Safety Officer: Any food business operator who fails to comply with the FSSAI registration login rules and regulations, or the principles issued by such officer without giving any reasonable reason for non-compliance, will be fined ₹2 lakh.
- Unsanitary conditions in manufacturing or processing units: Any business that manufactures or processes food in unsanitary conditions, whether directly or indirectly, faces a penalty of up to ₹1 lakh.
- Possession of Adulterant: If a food business operator is in possession of any adulterant that is harmful to one’s health, the penalty is up to ₹10 lakh, the penalty is up to Rs 2 lakh in case the adulterant is not injurious to health.
- Any Contraventions: There is no specified penalty for this offence, but the penalty is generally up to ₹2 lakh.
- Unsafe product: Any enterprise either directly or indirectly uses hazardous food products, which results in:
- Death – imprisonment of not less than seven years + fine of up to ₹10 lakh shall be imposed as a penalty
- Grievous injury: A fine amount of ₹5 lakhs and 6 years of imprisonment as the retribution
- Injury: Detention of 1 year and fine up to ₹3 lakh as forfeiture
- No injury: Imprisonment of six months and a fine up to ₹1 lakh will be imposed as a penalty.
- Circulating false information: You may face jail time of up to three months, and a fine of up to ₹2 lakh will be levied on any business either directly or indirectly circulating false news.
- Interference of confiscated items: Any individual/business that tries to keep, release or fiddle with the seized entity will face imprisonment up to six months with a fine of up to ₹2 lakhs
- Obstruction or Impersonation of a Food Safety Officer without any reasonable excuse: In this case, the penalty is imprisonment up to three months and a fine up to Rs 1 lakh.
Conclusions
Every person has a right to a healthy life, and every product fit for human consumption could perhaps meet the highest possible standards. Penalties and punishments are excellent way to prevent any potential irregularities. To encourage proper compliance, all punishable offences under the FSSAI carry severe penalties.