INTRODUCTION
1.1. With a rise in population and an increase in income levels, the demand for food products is on a surge. In addition to ensuring adequate food supply, it is also essential that people have access to nutritious and safe food. Further, India is one of the world's leading producers of several food products including rice, wheat, dairy products, buffalo meat, pulses, jute and fruits.1 Accordingly, the need to regulate the Indian food industry to ensure safety of food products is urgent and inevitable.
1.2. The Food Safety and Standards Act, 2006 ("the Act") was enacted after consolidating multiple laws relating to food safety with an objective to streamline the culture of safe food and ensure that it is fit for human consumption in the country. The Act governs a wide array of activities in relation to food products and ingredients including manufacturing, importing, processing, packaging, wholesale, distribution and selling. The Act brought under its ambit multiple rules and regulations which set out the nuances to govern the various food products and their safety.
1.3. Established pursuant to the Act, the Food Safety and Standards Authority of India ("FSSAI"), is the apex regulatory body that is responsible for setting the standards for food products. The FSSAI, further ensures that food businesses comply with the obligations and conditions as applicable to them under the provisions of the Act. Under the Act, necessary penalties may be imposed for manufacturing, storing, distributing, selling and/or importing of sub-standard, misbranded, unsafe, unhygienic and adulterated food, engaging in misleading advertisement and providing false information.
1.4. In this article, we attempt to analyse the applicability of, registration / licensing requirements, and compliances under the Act and the rules and regulations made thereunder, along with highlighting other notable considerations for companies engaged in the food business.
II. APPLICABILITY AND REGISTRATION REQUIREMENTS UNDER THE ACT
2.1. Applicability: The Act is applicable on all entities or persons who carry out a 'food business' which means "any undertaking, whether for profit or otherwise and whether public or private, carrying out any of the activities related to any stage of manufacturing, processing, packaging, storage, transportation, and distribution of food, importing, and includes food services, catering services, selling of food or food ingredients". 2
'Food' under the Act is defined as "any substance, whether processed, partially processed or unprocessed, which is intended for human consumption and includes primary food3, genetically modified or engineered food or food containing such ingredients, infant food, packaged drinking water, alcoholic drink, chewing gum, and any substance, including water used into the food during its manufacture, preparation or treatment but does not include any animal feed, live animals unless they are prepared or processed for placing on the market for human consumption, plants prior to harvesting, drugs and medicinal products, cosmetics, narcotic or psychotropic substances". 4
Accordingly, the applicability of the Act has been extended over a wide category of food products intended for human consumption.
2.2. Registration / License: The relevant factors to determine the requirement to obtain a registration / license by a 'food business operator' 5 ("FBO") are set out in the table below:
| Particulars | Nature of license/registration | ||
| Registration | State License | Central License | |
| Licensing / Registering Authority ("Licensing Authority") | Designated officer / food safety officer or any official of local body as notified by the state food safety commissioner. | Designated officer appointed by the state food safety commissioner. | Designated officer appointed by the chief executive officer of the FSSAI. |
| Activities for which registration / license is required | A registration as a 'petty FBO' is required to be obtained by a 'petty food manufacturer'. 6 | An FBO who is engaged in a food business other than: (i) the business for which it is mandatory to obtain a central license; or (ii) in case the FBO is covered under the category of a 'petty FBO'.7 | An FBO engaged inter alia in dairy unit, vegetable oil processing unit, food processing units above a prescribed threshold, 100% export-oriented units, importers, food catering entities established under central agencies or any FBO operating in 2 or more states.8 |
| Other criteria to obtain registration / license | Depending on the nature of activities, the
requirement to obtain a registration, state license or central
license may depend upon certain criteria, including the
following9:
|
||
Accordingly, nearly every type of food-related business is covered under the ambit of the Act and the FSSAI, and is required to obtain a registration/license. Further, penalties may be imposed on an FBO who carries out a food business without obtaining/renewing necessary registration or license. Recently, FSSAI has issued notices to several canteens and food joints operating in schools, colleges and universities without obtaining the required registration/license.10
2.3. Key considerations for obtaining registration/ license: Set out below are the key considerations with respect to obtaining a license / registration under the Act:
- License as a relabeller: An FBO utilising a third-party manufacturer or processor to manufacture or package the food products, is required to obtain a license as a 'relabeller'.11 Accordingly, an entity manufacturing its products through contract manufacturing is required to obtain a license as a 'relabeller'. Notably, entities who are engaged in manufacturing, but outsource the packaging of their products, will be required to obtain a license as a 'manufacturer' as well as a 'relabeller'.12
- Registration / License by direct sellers: Since direct sellers are engaged in selling food products directly to end consumers, they are categorised as a 'retailer' under the Act. Accordingly, every direct seller engaged by a direct selling entity is required to ensure compliance with the Act and obtain registration/license as a 'retailer'.13
- License under e-commerce category: FBOs which are providing online platforms for sale and purchase of the food products are required to obtain a license under the 'e-commerce' category.14 To clarify, an online platform which only lists FBOs and does not engage in any activity for sale and purchase of food products are not required to obtain an e-commerce license. However, such online platform should only list FBOs with valid license/registration.15 Accordingly, food aggregators like Zomato and Swiggy can only list FBOs, including home chefs, cloud kitchens or roadside kiosks, only if the FBOs have obtained registration/license under the Act.16 Further, in case an FBO engaged solely in an e-commerce activity is operating from two or more states, it is only required to obtain a central license for the head office and no separate licenses for the premises located in all of the states are required.17 This is in contrast to FBOs engaged in activities other than ecommerce, where the requirement to obtain separate licenses for premises located in other states persists, even in case a central license for the head office/registered office has been obtained.
- Premise-based license: Depending upon the fulfilment of the relevant criteria as highlighted above, a separate license or registration must be obtained for each unit/premises from the relevant Licensing Authority, despite the FBO having procured a central license for the head office/registered office. 18 Further, no FBO is allowed to procure multiple licenses/ registration for a single premise and all kinds of food business activities that are being conducted at the same premise can be applied for in a single FSSAI license/ registration.
- Eligibility to obtain higher category of license: If an FBO fulfils all other requirements such as conditions and compliances associated with the category of license, it is allowed to file an application to obtain a higher category of license, as compared to the kind of license for which it meets the relevant threshold. Further, in case an FBO undertakes more than one business activity from a single premise, the category of the license will be determined taking into account the activity for which a higher category of license is required to be obtained based on the fulfilment of relevant criteria.19
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Footnotes
1 Please refer to: https://www.ibef.org/industry/agriculture-india ; https://www.fao.org/india/fao-in-india/india-at-aglance/en/#:~:text=India%20is%20the%20world's%20largest,poultry%2C%20livestock%20and%20plantation%20crops.
2 Section 3(1)(n) of the Act.
3 Section 3(1)(zk) of the Act defines 'primary food' as an article of food, being a produce of agriculture or horticulture or animal husbandry and dairying or aquaculture in its natural form, resulting from the growing, raising, cultivation, picking, harvesting, collection or catching in the hands of a person other than a farmer or fisherman.
4 Section 3(1)(j) of the Act.
5 Section 3(1)(o) defines a 'food business operator' as a person who carries on food business and who is responsible for undertaking compliances under the Act.
6 Regulation 1.2(4) of the Licensing Regulations defines a petty FBO as: A 'petty food manufacturer' includes a petty retailer, hawker, itinerant vendor, temporary stall holder, small scale or cottage food business industry or any food business whose annual turnover does not exceed INR 12 lakhs or production capacity does not exceed 100 kg/ltr per day or procurement or handling and collection of milk is up to 500 litres of milk per day or slaughtering capacity is 2 large animals or 10 small animals or 50 poultry birds per day or less.
7 Regulation 2.1.2(4) of the Licensing Regulations.
8 Regulation 2.1.2(3) of the Licensing Regulations.
9 An illustrative list of activities, along with the applicable criteria and thresholds to obtain the type of license can be accessed at: https://foscos.fssai.gov.in/assets/docs/KindofBusinessEligibility.pdf.
10 Please refer to: https://www.newindianexpress.com/cities/vijayawada/2023/Mar/18/no-licence-most-canteens-come-underfssai-scanner-2557206.html.
11 Please refer to: frequently asked question no 71 at https://foscos.fssai.gov.in/faq-license-registration.
12 Please refer to: frequently asked question no 3 at https://foscos.fssai.gov.in/faqs-license-registration?faqType=LR.
13 Order number 15(6)2018/FLRS/RCD/FSSAI dated July 8, 2019 and September 19, 2019.
14 Please refer to: frequently asked question no 78 at https://foscos.fssai.gov.in/faq-license-registration.
15 Please refer to: frequently asked question no 79 at https://foscos.fssai.gov.in/faq-license-registration.
16 Please refer to: https://www.financialexpress.com/life/lifestyle-a-licence-to-feed-home-chefs-cloud-kitchens-kiosks-areunder-the-lens-for-being-legit-and-following-norms-of-food-industry-2479691/.
17 Please refer to: frequently asked question no 78 at https://foscos.fssai.gov.in/faq-license-registration.
18 Please refer to: frequently asked question no 1 at https://foscos.fssai.gov.in/faq-license-registration.
19 Please refer to: frequently asked question no 118 at https://foscos.fssai.gov.in/faq-license-registration.
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