Applicability of FSSAI Licensing & Compliance For Food Business in India

Basics of FSSAI

Are you a restaurateur? or doing a food business? Running a cloud kitchen? or delivering food using e-com giants like Zomato or Swiggy? Then you must be aware of FSSAI, an acronym of India’s Food Safety and Standards Authority.

You might have seen The Logo of FSSAI on all the food packets you buy. Wondering, what it is, or the registration or license required to start and run the food business.

The Food Safety and Standards Authority of India (FSSAI) is a government regulator to ensure the availability of Safe, Wholesome, and Hygienic food by the Food Business Operators (FBO).

To achieve its objective, the FSSAI has laid down several rules and standards, and it ensures the compliances of the set standards through regular inspection of the food businesses/FBO. The FSSAI has categorized FBOs into different categories.

These categories of FBOs are elaborated further in the following sections “Type of Food business operator”. “Food business operator” is a unique word in the food industry. That means a person by whom the business is carried on or owned and is responsible for ensuring the compliance of Food Safety And Standards Act, 2006, rules and regulations made thereunder.

FSSAI must have the data of the businesses who are dealing in the food to ensure compliance with the set standards by the FBO. Thus, every food business operator(FBO), whether small or large, needs to either register themselves with FSSAI or procure a licence before starting the food business or related enterprise.

The food licences are of two types one is a state licence, and the other is a central licence. The state licence is provided by state authorities, whereas the central licensing unit of FSSAI controls the Central Licence.

It is essential to know whether the FBO needs just registration or a central/state licence for its business. Typically, all small food business operators who are not doing any manufacturing or processing and having an annual turnover of less than 12 lacs and are carrying business in one state only need to seek FSSAI Registration. In contrast, the Other food business operator needs to procure a licence.

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Legal Provisions

The Law: Section 31 of The Food Safety And Standards Act, 2006 provides for Licensing and registration of food business. Before starting a Food Business, every person is required to register or obtain the State or Central License under the FSSAI. The applicable regulation is the Food Safety and Standards (Licensing and Registration of Food Businesses) Regulation, 2011.

FoSCoS: Recently, FSSAI has launched a Food Safety and Compliance System (FoSCoS) to replace the earlier Food Licensing and Registration System (FLRS). Food Safety and Compliance System (FoSCoS) is a cloud-based, upgraded new food safety compliance online platform.FoSCoS will be one point platform that will enable the across-the-country data-driven regulatory approach. FoSCoS will be offering licensing, registration, inspection, and annual return modules. The said system is launched with the view of One Nation, One Food Law, the benefits of a centralized law, rules and regulation, are as under:

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• It ensures globally benchmarked food standards and practices.
• Ensures consistency in enforcement
• Foster management in food testing with standardized testing methods and protocols

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Term & Renewal: The FSSAI Registration or the Licence is location specific and is term bound. FBO could apply for registration or licence at a particular location for a term of one year to five years, depending upon the choice. The government for FSSAI Registration or License will vary as per the term chosen by the FBO while making the relevant application. As the FSSAI Registration or License is valid only until the term for which it is granted, the renewal application must be filed before the expiry of the validity. If the renewal is not done within the time, the applicants need to file a new application for registration or licence for its food business. Further, the FBO engaged in Manufacturing and Importing of Food Products needs to file a Return(S) with FSSAI regarding each class of food products handled by such FBO during the previous financial year. [/box]

SEE THIS: FSSAI Revised Product Labelling Requirements Norms

What is an FSSAI License and Registration

Any Food Business Operator (FBO) engaged in activities related to any stage of food-related business needs to apply for registration/ licence based on its eligibility criteria on the online portal named FoSCoS. No FBO could start its food business without Food registration/Licence. It is a mandatory requirement under Food Safety And Standards Act, 2006. Following activities relating to Food Business are Covered under FSSAI.

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• Manufacturing
• Storage
• Distribution of Food
• Catering Services
• Processing
• Transportation
• Import & Export
• Sale of Food
• Packaging
• Trading
• Food Services
• Sale of Food Ingredients [/tie_list]

Difference between Food licence and Food Registration

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Food Licence

• It is typically required for the businesses having a turnover of more than 12 lacs or by the FBO engaged in food processing and manufacturing.
• The government fee for a food licence ranges from Rs 2000 to 5000 Per Annum for a State licence and Rs 7,500/-Per Annum for the Central Licence.
• FSSAI licence carries 14 digits in it wherein the first digit starts with 1
• It is granted by state Licencing Authorities in the case of State licence and central Licencing Authority in case of Central Licence.

Food Registration

• It is required by petty food manufacturers or the FBO having a turnover of less than Rs 12 Lakhs unless the FBO is covered under mandatory licencing.
• The government fee for registration is Rs 100 for each financial year.
• FSSAI registration number also carries 14 digits in it, but the first digits starts with 2.
• Food Registration It is always granted by the State Licencing Authority

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Applicability of FSSAI Registration/License

Every Food Business Operator needs to seek either registration or licence from the food department. The applicant’s eligibility for food registration and the licence is determined based on turnover, production capacity, nature of business and area of operation cumulatively. Even if an FBO falls in the category of registration as per turnover, its nature makes him eligible for licences. The FBO has to apply for a licence (State/Central Licence).

READ THIS: All about FSSAI – Food Safety and Standards Authority of India

FSSAI Applicability Based on Turnover

Turnover of an entity makes it big or small. A petty manufacturer who manufactures or sells any article of food or a stallholder, petty retailer, hawker, itinerant vendor or a temporary stallholder or small scale or cottage, or other industries relating to food business or tiny food business operator; requires registration only. Apart from the criteria to determine the eligibility of a food business operator to procure registration/licence on the basis of turnover if FBO is not in manufacturing/ Processing Kind of Businesses is as under:

Type of License	Applicability Based on Turnover
FSSAI Registration	FSSAI Registration is applicable If the annual turnover of the FBO is less than Rs. 12 Lakhs
State License	FBO leed to seek state licence if annual turnover is more than 12 lakhs but less than 20 crores
Central License	The central licence is required if the annual turnover is more than 20 crores except for transporters. In the case of Transporters, the central licence is required if turnover is more than Rs. 30 Crores per annum.

FSSAI Applicability Based on Production Capacity

FBO deals or manufactures different types of food items. Some foods are highly-priced, whereas the other food items are basic and are reasonably priced at affordable rates. The turnover cannot be the correct method to determine the applicability of registration /licences of the FBO, so the assessment of FBO for registration/licencing requirement is also done based on its production capacity. The criteria to determine the eligibility of a food business operator to procure registration/licence based on production capacity is as under:

Type of License	Applicability Based on Production Capacity
FSSAI Registration	[tie_list type=”checklist”] Production Capacity of Food (other than milk and milk products and meat and meat products) – does not exceed 100 kg/ltr per day- Registration is required. Dairy Units, including milk chilling units procurement or handling and collection of milk, are up to 500 litres of milk per day /Up to 2.5 MT of Milk Solids per annum. Only FSSAI Registration is required for Petty Milkman, Milk Vendors. For all slaughterhouses which have a slaughtering capacity of two large animals or ten small animals or 50 poultry birds per day or less, registration is required.[/tie_list]
State License	[tie_list type=”checklist”] The state license is required when the Production Capacity of food (other than milk & Mean and the products made from milk and meat) is 101 Kgs/2 MT Liters per day. The Licence fee will vary as per the production capacity of the food business in the range of Rs 3000 to Rs 5000 per annum. Dairy units including milk chilling units procurement or handling and collection of milk are 501 – 50,000 Litres of Milk per day /2.5 MT –2 500 MT of Milk Solids per annum state licence is required. The licence fee will vary as per the production capacity of the food business in the range of Rs 3000 to Rs 5000 per annum. All slaughterhouses whose slaughtering capacity is Large Animals: 3 to 50 Small Animals: 11 to 150 Poultry Birds: 51 to 1000 S requires State Licence.[/tie_list]
Central License	[tie_list type=”checklist”] Central License is needed when the Production capacity of food (other than milk and milk products and meat and meat products) More than 2 MT per day central licence is required exclusive of Grains, Cereals or Pulses Milling Units. Dairy units, including milk chilling companies procurement or handling and collection of milk, are in excess of 50,000 litres of liquid milk/day or 2500 MT of milk solid per annum, is required to get Central License. All slaughterhouses which slaughtering capacity is in excess of 50 large animals or 150 or more small animals including goat and sheep or 1000 or more poultry birds per day, is required to get Central License. [/tie_list]

FSSAI Applicability Based on Area of Operation

Area of operation here means the locations of the units of FBO. The applicability of registration/licence may vary depending upon the number of FBO units and their place.

Type of License	Applicability Based in Area of Operation
FSSAI Registration	A petty manufacturer who himself manufactures or sells any article of food can do business at one location only and thus requires registration with the concerned food authority.
State License	Suppose FBO is operating within the state, and its limit does exceed the turnover and production capacity enumerated above for central licence. In that case, it requires a state licence or registration at each location at which it carries its food activity. In simple words, if an FBO has ten outlets in a state, it will require ten state license or registration based on its turnover and/or production capacity, i.e. separate state licence or registration for each location.
Central License	FBO carrying business in more than one state need to apply for the central license in the state in which its head office is located

FSSAI Applicability Based on Nature of Business

The application of licence /registration also depends on the nature of business. These are summarised in the below table:

Type of License	Applicability Based on Nature of Business
FSSAI Registration	Registration is required for Petty Milkman, Milk Vendors.A producer of milk who is a registered member of a dairy Cooperative Society registered under Cooperative Societies Act and supplies or sells the entire milk to the Society does not require registration with FSSAI
State License	All Cereals, Grains, units of Pulses Milling without any limit on Production capacity require a state fssai licence
Central License	Irrespective of the turnover, production capacity and area of operation following food businesses require the central licence: [tie_list type=”checklist”] E-commerce operators like Swiggy, Zomato etc. Importer/exporter FBO manufacturing the food which is being introduced in the country Food catering services in establishments and units under Central government Agencies like Railways, Air and airport, Seaport, Defence etc.[/tie_list]

Manufacturer of Food Products (FBO)

Each step involves converting raw material derived from natural sources like agriculture produce, livestock, earth, air etc. For intermediate or final consumption is called manufacture or processing. The process includes procurement, receipt, preparation, Manufacturing/processing, packaging, storage, distribution & transportation of food products.

FBO having a manufacturing/processing unit means a person/entity which owns or operates an establishment that manufactures or processes a food product. It includes contract manufacturers, contract packers and other entities that manufacture or process a food product. FoSCoS has further classified the food manufacturing/Processing unit in the below categories:

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• Dairy Unit: Dairy processing means processing, handling, manufacturing, storing, packing & distribution or transportation of milk and the products made of milk
• Vegetable Oil And Processing Units: Vegetable oil processing and refining results in the vegetable oil, extraction of solvents/expeller from the vegetables
• Slaughtering Units: Slaughtering means transporting, stunning, butchering, dressing, processing, storing & distributing of live animals/poultry birds.
• Meat Processing Units: Processing, packaging, storing & transportation of meat & meat products of slaughtered animals/poultry birds. It also includes Fish Processing, handling, manufacturing of fish products, packing, storing, distribution & transportation.
• Food Or Health Supplements And Nutraceuticals Etc.: As per Food Safety and Standards (Food or Health Supplements, Nutraceuticals, Foods for Special Dietary Uses, Foods for Specialised Medical Purposes, Functional Foods, and Novel Food) Regulations, 2016
• General Manufacturing: Repacking means packing food products into different sizes with labelling after minimal processing like sorting, grading, sieving, etc., from the wholesale food packages.
• Proprietary Food: Proprietary Food means a food article that has not been standardised under the FSSAI Regulations. However, it does not include novel foods, foods for special dietary uses, foods for particular medical purposes, functional foods, nutraceuticals, health supplements and other food articles.
• Non-specified food and food ingredients: Though the FSSAI standards apply to almost all food articles, however ther are food articles apart from the proprietary Food or Food ingredients, such as additives, processing aids and enzymes for which the FSSAI has not come up with standards. The FBO dealing in these kinds of food articles must apply for product approval under FSSAI (Approval of non-specified food and food ingredients) Regulations. The licenses for non-specific food items and food ingredients are dealt with by the FSSAI at their headquarter in Delhi.
• Substances Added to Food: Substances added to Food means Food Additives, Enzymes and their preparations, Source, Flavouring agents and their preparations, Processing Aids, Nutrients and their preparations, Microorganisms and Microbial Preparations & Functional Ingredients added to Food as specified under the Food Safety and Standards (Food Products Standards and Food Additives) Regulations.[/tie_list]

RECOMMENDED READ: 

• A Brief about FSSAI Annual Return – Form D1 and Form D2
• FSSAI: Highlights of FSS (Labelling and Display) Regulations, 2020

FBO as Traders (Wholesaler or Retailers)

Trading FBO is a person or entity which deals in manufactured/processed food but is not directly involved in the manufacturing/processing of food. FoSCoS has further classified food FBO as Trader in the below categories:

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• Storage (Other than Cold Storage): The facilities used to store the food products, whether in packaged or unpackaged conditions, for further distribution. It includes warehouses and godowns etc., by whatever name is called.
• Cold Storage (For Refrigerated or Frozen Foods): This includes the storage facilities having a facility to maintain controlled temperature, suitable for safe storage of food articles in frozen or refrigerated stage, for its further sale or supply in the usual trade.
• Cold Storage (Not For Refrigerated or Frozen Foods): The Cold Storage facility is commonly used to warehousing the food products in packed or unpacked condition at a controlled temperature. This is generally used to store dry commodities & agricultural produce, where the concentrations of oxygen, carbon dioxide and nitrogen, temperature and humidity are regulated
• Wholesaler: The wholesaler is an FBO that typically buys the food products in bulk and sells them to small retailers or resellers for further sale to the end-user.
• Distributor: The distributors are those food business operators appointed by the manufacturers of food products to sell the products through an established sales network of wholesalers and retailers.
• Supplier: In the supply chain of the food products, suppliers play a very significant role in carrying out the supplies to the consumer based on the specific requirement raised by such consumer.
• Marketer: Marketing (Self) means promoting the food product of a brand in the market which the self owns. Marketing (Third Party) means promoting the food product of a brand in the market that the self does not own.
• Transporters: Transportation is an activity of transporting food products (both packed and bulk) from one location to another in vehicles/containers, including specialized vehicles like insulated refrigerated van/ wagon, oil/milk tankers etc.
• Retailer: Retail is an activity where food products are procured from a manufacturer, distributor or wholesaler and sold to the ultimate end user.
• Food Vending Agencies: Agencies engaged in selling packaged or fresh food from a temporary or fixed stall/cart/ machine by an individual or through automated vending machines.[/tie_list]

FBO as Food Service Providers:

The FBO which is engaged in providing food services whether at its premises or at the premises of clients by way of selling or serving prepared food including the raw food and beverages falls in the category of Food service provider. FoSCoS has further classified food FBO as Food Service Providers is as under :

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• Petty Retailer Of Snacks/Tea Shops: Temporary or fixed stall or food premise involved in preparation, storage, distribution and sale of food products that can be served as snacks/ tea/coffee and similar variants.
• Hawker (Itinerant / Mobile food vendor): Selling packaged or freshly prepared food by travelling (usually on foot or movable carts) from one location to another.
• Restaurants: Restaurant is a type of food service operation which prepares, serves food and drinks to customers in exchange for money. Meals are generally served and eaten on the premises, but many restaurants also offer take-out and food delivery services, and some offer only take-out and delivery.
• Club/Canteen: Canteen or Cafeteria is a dining area in an institution/ establishment serving food (being prepared in the premises or procured from another location or source) to individuals associated with or visiting the institution.
• Caterer: Food Service Establishment involved in preparation and serving of food for consumption of a group of individuals working or visiting offices of railways.
• Supplier: In the supply chain of the food products, suppliers play a very significant role in carrying out the supplies to the consumer based on the specific requirement raised by such consumer.
• Hotel: Hotel is a commercial establishment providing lodging, meals, and other guest services.In general, to be called a hotel, an establishment must have a minimum of six letting bedrooms, at least three of which must have attached (ensuite) private bathroom facilities
• Food Vending Establishment: FBO which sell packaged/fresh food from a temporary or fixed stall/cart/ machine by an individual or by automation come in the category of food vending establishment. The different types of food vending establishment are as under:

1. • Dhaba:Food service establishment generally located near roadside/highway involved in processing, storing, packaging and selling of food to customers for consumption.
   • Boarding Houses Serving Food:A building providing food and lodging for paying guest.
   • Banquet Halls with food catering arrangements:A specified area such as hall which is used for the purpose of hosting parties/ceremonies involved in preparation and serving of food to customers for consumption.
   • Home Based Canteens/ Dabbawalas:An individual or establishment involved in distribution of packed meals (usually packed lunch) from food service establishments such as home based caterers or restaurants to customers.
   • Permanent/ Temporary Stall Holder:A stand /booth /compartment /small covered area being used for preparation and /or sale of freshly prepared or packaged food for consumption. This structure may be temporary or permanent (fixed).
   • Food stalls/ Arrangements in religious gatherings/ fairs etc:A stand/booth/compartment/small covered area being used for preparation and /or sale or distribution of freshly prepared or packaged food being offered as prasad in a religious institution. [/tie_list]

Other Categories of FBO

Through most of the food business operators are well covered under the above description of FBO, there are other categories of the food business, that also comes under the purview of FSSAI and are subject to applicable provisions of the FSSAI, following are the other kinds of the FBO to which FSSAI Applies.

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• E-Commerce: E-commerce also known as electronic commerce or internet commerce, refers to the buying and selling of goods or services using the internet, and the transfer of money and data to execute these transactions. Ecommerce is often used to refer to the sale of physical products online, but it can also describe any kind of commercial transaction that is facilitated through the internet
• Import or Export by Food Business Operator (FBO)

1. • Importer:Import of food means bringing to the domestic market from a foreign country in the course of trade food products including food ingredients and additives for food.
   • Exporters:FBO as an exporter means an individual or an entity sending an Exporter FBO who sends food products including food ingredients and additives for food to the foreign country in course of trade. The exports are further classified in below categories:
     • 100 % Export Oriented units
     • Trader / Merchant
     • Manufacturer

• Mid-Day Meal: It is a government-designed and supported scheme launched nationwide for school age children in order to provide them better nutrition. This scheme provides free lunches on working days for school-going children supported under Sarva Shiksha Abhiyan, and National Child Labour Project schools run by the ministry of labour. There are two categories of FBO’s under this scheme as mentioned below:

1. • Importer: Import of food means bringing to the domestic market from a foreign country in the course of trade food products including food ingredients and additives for food.
   • Exporters: FBO as an exporter means an individual or an entity sending an Exporter FBO who sends food products including food ingredients and additives for food to the foreign country in course of trade. The exports are further classified below categories:
   • Caterer: Caterers are those FBO that prepares and transport food to educational institutions under the Midday meal scheme.
   • Canteen: A canteen or Cafeteria is located inside the institution covered under a mid day meal scheme to serve food to individuals associated with or visiting the institution. They may prepare food on the premises or procure the food from another location or source. [/tie_list]

FDI Business

100% FDI is allowed in India’s food manufacturing and food processing sectors under the automatic approval route. No prior permission for FDI is required in India to set up a food manufacturing or food processing unit. Our startup team shall help you with the formation of a company with foreign investment. However, for retail and e-commerce businesses, the FDI is also permitted up to 100%. However, under the approval route. The concerned ministry grants approval for the FDI in retail and e-commerce on a case-to-case basis.

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• 100% FDI Under Automatic Route
  • Manufacturing
  • Food Processing

• 100% FDI Under Approval Route
  • Retail (Including Wholesale)
  • E-commerce [/tie_list]

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Frequently Asked Questions

Q. Who needs to register?

A. Any FBO carrying food business needs to register itself with FSSAI by applying through the online portal of FOSCoS.

Q. Who issues FSSAI License and Registration?

A. Food Safety and standards Authority of India issues FSSAI License and Registration through its licensing at the central and state level.These licensing authorities have designated officers for grant of licence /registration in compliance with the procedure laid down under FOOD SAFETY AND STANDARDS (LICENSING AND REGISTRATION OF FOOD BUSINESSES), REGULATIONS 2011.

Q. Do I need to apply for a different licence for carrying out business in different food products at the same premises?

A. No, a single licence / Registration will be sufficient to deal in different food products a s you are caring business from the same premises. The food licence /Registration is location specific not food specific, meaning thereby if you have ten outlets of a single food product say ice cream in Delhi,you need to procure licence /registration for each outlet based on its turnover.

Q. A FBO carrying out food business in different states and having multiple units in these states, can it procure a common licence for all?

A. No, there is no provision of a common licence for all the units located in different States. The food licence is premise specific. The golden rule is “One premise one licence”.The FBO need to choose one place as its principal place of business/head office and for that place it need to apply for Central licence for all other units it need to apply for central or state licence or registration certificate as per eligibility criteria of each unit in that particular state.

Q. Can I manufacture or process any food product from the premise at which licence is granted?

A. A FBO cannot manufacture or process the food products which are not mentioned in the Licence. So, before starting any manufacturing or processing of food items you need to check whether it falls in the food category for which licence is granted and if not you need to file for modification. Once the licence is duly modified as per the desired food category you can start the business with the same.

Q. What is the government fee for a food licence or registration?

A. The government fee for licence /registration will vary as per the term for which an application for food licence/registration is made.A FBO may choose a maximum term of five years as a validity period at the time of making application for food licence/registration.Government fee for Food licence and registration is as under:

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• Food Registration- Rs 100 p.a.
• State Licence- Rs 2000 to Rs 5000 p.a depending on the production capacity of a processing/ manufacturing food unit, in all other cases fee is Rs 2000 p.a
• Central Licence- Rs 7500/- p.a [/tie_list]

Q. Is there any validity period for FSSAI registration/Licence?

A. The food licence /registration can have a maximum validity period of five years.Th e validity period of the food licence/registration will vary from one year to five years as per the choice opted by the FBO at the time of making an application for the same.

Q. When to apply for renewal?

A. The renewal application must be filed 30 days before the expiry of validity period. If an FBO fails to file the renewal within the prescribed time limit it may apply for renewal within the validity period with a late fee of Rs 100 per day.

Q. What will be the fee for filing the renewal for a period of three years, if licence fee is Rs 2000 pa.?

A. The wholesaler or retailer of drugs compulsorily requires a refrigerator at his medical Store.

Renewal Fee= Rs 2000 X 3= Rs 6000 ( renewal fee for three years) Late fee = Rs 100 X 30 = Rs 3000 (30 days delay ) Total fee for renewal Application for 3 years = Rs 9000/- Thus the timely filing of renewal could have saved a late fee of Rs 3000/-

Q. Can a food registration /Licence be modified?

A. Yes, the food licence can be modified if there is any change in the information provided to the licensing authorities at the time of grant of licence but the food registration cannot be modified to food licence. There are two types of modification. These are:

• Form C Modification -If there is any change in the particulars appearing in licence like name of the applicant, its address, production capacity, kind of business, product, FBO need to apply for modification with a fee of Rs 1000 plus a fee equal to the difference in annual fee in case of up-gradation of licence. If there is no upgradation of licence Form C modification fee will be Rs 1000 only.
• Non-Form C Modification- It is a type of modification in which particulars appealing in the licence does not change.It could be in case of change of nominee, Change in contact details of authorized person or directors/partners/proprietor of the applicant entity, change in any supporting document attached at the time of grant of licence.No fee is required for modification of non-form C details.

Q. What happens if I close the food business?

A. The closure of the business is to be intimated to the FSSAI by way of making an online application for surrender of Registration certificate or Licence through FoSCoS. Once the surrender application is approved the Food business is considered to be closed for FSSAI.

Q. Is food licence /registration cancelled after the death of the proprietor?

A. No , the food licence /registration shall be valid for 90 days from the death of licence or registration certificate holder for the benefit of legal heir of the deceased. The legal heir shall file an application for transfer of food licence /registration in their favor. If there is a delay in filing the said transfer application the designated office may condone such delay by recording reason in writing.

Q. Can I transfer my food licence /registration?

A. No, the food licence of an entity cannot be transferred but a food licence procured by an individual could only be transferred to his/her legal heir in case of death.

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