As we now know the Food Safety and Standards Act, 2006 (FSS Act) regulates Food Businesses and their Operators under a licensing regime supervised by the Food Safety and Standards Authority of India (FSSAI). It is crucial to have a basic understanding of Food Businesses and Food Business Operators (FBOs), which we covered in our article “Introduction to Food Law”. For a quick recap, a Food Business refers to any undertaking engaged with food, while an FBO refers to a person conducting or owning such activity.

FSSAI through the FSS Act makes it mandatory for all FBOs to obtain either a license or registration from the FSSAI before commencing their food business. Registration is meant for small businesses or petty food business operators, as it entails fewer compliances and filings with the FSSAI, justifying their size and impact on overall food safety. Therefore, the present article will not delve deeper concerning registration under the FSS Act. In contrast, FSSAI licenses apply to all other Food Businesses and Operators, with strict compliance requirements such as safety audits, safety management, annual returns, etc., depending on the kind of business (KoB) undertaken.

Section 31¹ of the FSS Act strictly prohibits the commencement or carrying on of any food business except under a license, except for registration provided under Section 31, sub-section 2. Section 31 of the FSS Act is the enabling provision for the licensing and registration of FBOs, supplemented by the Regulations² made under the FSS Act govern the residuary and ancillary matters on registration and licensing.

Collectively, the FSS Act and Regulations made therein postulate that to open and operate any food business, the FBO must apply for a license/registration with the FSSAI. The license application needs to be made to the Designated Officer (D.O.) with the applicable fees, and it can either be accepted or rejected (in the interest of public health). However, the license application needs to be decided within 2 months from the date of application, failing which the FBO is permitted to start the food business. Further, in cases where the 2-month period is over, the Section dictates the D.O. to issue a license and an improvement notice for any non-compliance/improvements to be made to the application or business. These improvement notices³ issued by the D.O. are mandatory for FBOs to comply.⁴

The Section also provides for an appeal against the rejection of the license application, which is to be preferred before the Commissioner of Food Safety. It provides for the subsistence of the FSSAI license granted on the death of the FBO for 3 months for the deceased’s representatives to take corrective steps. The period of 3 months can be extended at the discretion of the D.O. on a case-by-case basis. Corrective steps may include updating the license details to reflect the new ownership or management.

The section also lays down conditions for single licenses and different licenses, based on one or more articles of food or premises in the same or different areas. On one hand, the section clearly states that single licenses can be granted by the D.O. for one or more articles of food, or for different establishments/premises in the same area. On the other hand, the section mandates that different applications (different licenses) are required to be made by the FBOs for premises falling in different areas. The confusion herein stems from the word “area,” leaving the FSSAI to tackle the situation in practicality. However, in our opinion, the area under the section will refer to the area under the supervision of the licensing authority, and all premises situated therein may be provided a single license. It has become a norm now that different premises require different licenses while having one or more articles of food on the same premises can be covered under a single license and application to FSSAI.

Further, the FSS Act provides liability for an FBO that commences the food business without a license, which is a punishable offence under Section 63⁵ of the FSS Act, providing for a penalty amounting to up to Rupees Ten Lakhs (Rs. 10,00,000/-). Non-compliance with the direction of the Food Safety Officer is punishable under Section 55⁶ with a penalty amounting to up to Rupees Two Lakhs (Rs. 2,00,000/-).

As food falls in List 3 - Concurrent List under the Constitution of India, the Licencing Authority differs for certain types of KoBs and on other factors between the central and state governments.  Thereby, Licenses are further subdivided and are of two types depending upon the licensing authority: State FSSAI License and Central FSSAI License. Therefore, determining the eligibility and the correct type of license applicable becomes crucial for FBOs. The eligibility criteria and type of license required depend on several factors such as the type of food business, article of food, relevant KoBs applicable, and turnover, among others. The general bifurcation is as follows:

1. Registration- turnover up to 12 lakhs annually
2. State License- turnover up to 20/30 crores annually
3. Central License- turnover above 20/30 crores annually

Note that the eligibility for manufacturers and other such KoBs depends on the production capacity rather than the turnover and varies from one specific article of food to another.

The articles published on Legal Culinary’s “Insights & Blogs” page are for knowledge and educational purposes only and should not be construed as legal advice. It is advisable to consult your lawyer/legal consultant before making any decisions. We hope to spread awareness among the public, and this series of articles is an attempt towards a larger contribution from all players to food safety and security.

The Legal Culinary Delight

The FSSAI regulates the food business by enforcing a licensing regime on Food Business Operators (FBOs), making it an offence to operate a food business without a license, punishable with a penalty of up to Rupees Ten Lakhs (Rs. 10,00,000/-). Petty food business operators with an annual turnover of up to Rupees Twelve Lakhs (Rs. 12,00,000/-) are required to register with the authority. Any new food business cannot commence without a valid FSSAI License, and the authority has 2 months (60 days) to either accept or reject the application. If the application is neither accepted nor rejected within the stipulated time, the FBO is allowed to commence operations, and the authority must issue the license, with the option to issue improvement notices that the FBO must comply with. Failure to do so is also punishable under the FSS Act with a penalty of up to Rupees Two Lakhs (Rs. 2,00,000/-).

The licensing regime is further divided between the state and central government, as food is a subject contained in List 3 - Concurrent List under the Constitution of India. The eligibility depends on the KoBs applied and articles of food, among other factors, as notified by the FSSAI from time to time. Therefore, it is crucial to consult a legal advisor or lawyer to identify the optimum choice for your food business before commencing any activity.

The FSS Act also provides a procedure in case of the death of the FBO, allowing 3 months for their legal representatives to modify the FSSAI license held for the relevant food business.

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1. Section 31. Licensing and registration of food business.
(1) No person shall commence or carry on any food business except under a licence.
(2) Nothing contained in sub-section (1) shall apply to a petty manufacturer who himself manufactures or sells any article of food or a petty retailer, hawker, itinerant vendor or a temporary stall holder or small scale or cottage or such other industries relating to food business or tiny food business operator; but they shall register themselves with such authority and in such manner as may be specified by regulations, without prejudice to the availability of safe and wholesome food for human consumption or affecting the interests of the consumers.
(3) Any person desirous to commence or carry on any food business shall make an application for grant of a licence to the Designated Officer in such manner containing such particulars and fees as may be specified by regulations.
(4) The Designated Officer on receipt of an application under sub-section (3), may either grant the licence or after giving the applicant an opportunity of being heard and for reasons to be recorded in writing, refuse to grant a licence to any applicant, if he is satisfied that it is necessary so to do in the interest of public health and shall make available to the applicant a copy of the order:
Provided that if a licence is not issued within two months from the date of making the application or his application is not rejected, the applicant may start his food business after expiry of the said period and in such a case, the Designated Officer shall not refuse to issue a licence but may, if he considers necessary, issue an improvement notice, under section 32 and follow procedures in that regard.
(5) Every licence shall be in such form and subject to such conditions as may be specified by regulations.
(6) A single licence may be issued by the Designated Officer for one or more articles of food and also for different establishments or premises in the same area.
(7) If the articles of food are manufactured, stored, sold or exhibited for sale at different premises situated in more than one area, separate applications shall be made and separate licence shall be issued in respect of such premises not falling within the same area.
(8) An appeal against the order of rejection for the grant of licence shall lie to the Commissioner of Food Safety.
(9) A licence unless suspended or cancelled earlier shall be in force for such period as may be specified by regulations: Provided that if an application for a renewal of licence is made before the expiry of the period of validity of the licence, the licence shall continue to be in force until orders are passed on the application.
(10) The licence shall subsist for the benefit of the deceased’s personal representative or any other member of his family, until the expiry of –
(a) the period of three months beginning with his death; or
(b) such longer period as the Designated Officer may allow.

2. Food safety and standards (licensing and registration of food businesses) regulations, 2011.

3. 32. Improvement notices.
(1) If the Designated Officer has reasonable ground for believing that any food business operator has failed to comply with any regulations to which this section applies, he may, by a notice served on that food business operator (in this Act referred to as an “improvement notice”)–
(a) state the grounds for believing that the food business operator has failed to comply with the regulations;
(b) specify the matters which constitute the food business operator’s failure so to comply;
(c) specify the measures which, in the opinion of the said Authority, the food business operator must take, in order to secure compliance; and
(d) require the food business operator to take those measures, or measures which are at least equivalent to them, within a reasonable period (not being less than fourteen days) as may be specified in the notice.
(2) If the food business operator fails to comply with an improvement notice, his licence may be suspended.
(3) If the food business operator still fails to comply with the improvement notice, the Designated Officer may, after giving the licensee an opportunity to show cause, cancel the licence granted to him:
Provided that the Designated Officer may suspend any licence forthwith in the interest of public health for reasons to be recorded in writing.
(4) Any person who is aggrieved by –
(a) an improvement notice; or
(b) refusal to issue a certificate as to improvement; or
(c) cancellation or suspension or revocation of licence under this Act, may appeal to the Commissioner of Food Safety whose decision thereon, shall be final.
(5) The period within which such an appeal may be brought shall be –
(a) fifteen days from the date on which notice of the decision was served on the person desiring to appeal; or
(b) in the case of an appeal under sub-section (1), the said period or the period specified in the improvement notice, whichever expires earlier.
Explanation– For the purpose of this sub-section, the making of the complaint shall be deemed to be the bringing of the appeal.

4. See Section 31(4) of the FSS Act and Rule 2.1.4 of the Food safety and standards (licensing and registration of food businesses) regulations, 2011.

5. Section 63. Penalty for carrying out a business without licence.
If any person or food business operator (except the persons exempted from licensing under sub-section (2) of section 31 of this Act), himself or by any person on his behalf who is required to obtain licence, manufacturers, sells, stores or distributes or imports any article of food without licence, shall be liable to penalty which may extend to ten lakh rupees.

6. Section 55. Penalty for failure to comply with the directions of Food Safety Officer.
If a food business operator or importer without reasonable ground, fails to comply with the requirements of this Act or the rules or regulations or orders issued thereunder, as directed by the Food Safety Officer, he shall be liable to a penalty which may extend to two lakh rupees.