A Critical Evaluation of The Fssai Licensing Structure

In India, the food industry is witnessing rapid growth, thus, food safety compliance should not only be viewed as an exercise in complying with legal obligations but also as a component of long-term sustainable business success. All participants in the food supply chain must fulfil their responsibilities according to the guidelines provided by the Food Safety and Standards Authority of India (FSSAI) through the Food Safety and Standards Act 2006.

FSSAI registration or licensing indicates to customers that our food business meets all the important safety and hygiene standards. FSSAI registration is a requirement for any type of food-related business (i.e., a home-based food business, restaurant, cloud kitchen, manufacturing facility, or large food company) before commencing operations.

In this blog, we will discuss the full FSSAI registration process, as well as the phases that comprise the full extent of the FSSAI registration system, and the advantages/disadvantages of the system.

What is the Purpose of FSSAI Registration?

The purpose of FSSAI Registration for Food Business Operators (FBOs) in addition to ensuring they sell safe food to consumers as well as ensuring that Food Business Operators (FBOs) sell food to consumers safely.

Without an FSSAI registration or an FSSAI license, no food business may operate legally within the country of India. Penalties may include fines, revocation of food operation and, in some extreme instances, imprisonment.

Types of Fssai Registrations:

FSSAI registrations are classified as per the size and nature of food businesses.

1. Basic Registration – This type of registration is meant for small food businesses that have an annual turnover of less than INR 12 lakhs. For example, basic registrations may cover small/poorly operated food businesses such as home kitchens, roadside carts, etc..
2. State Licence – Medium food businesses, having annual turnover between INR 12 lakhs and 20 crores would apply for the State Licence. Restaurants, small-scale manufacturing, warehouses, transportation of food products from suppliers and distributors would all most likely fall under the State Licence.
3. Central Licence – Central licences are issued to large enterprising food businesses that have an annual turnover of over INR 20 crores, to food businesses operating in more than one state, to food importers/exporters, and to large scale food manufacturers.

Each type of registration must be completed according to its category’s documentation requirements for fees and compliance obligations.

The FSSAI registration process is digitally operated through the FSSAI Compliance System (FoSCoS) website. Each step of the process is clearly defined, and consists of the following four stages:

Stage 1: Setup a User Account:

To start the FSSAI registration process, an user must create an account on the FoSCoS website by providing a valid email address and mobile phone number. This will allow users to register applications, upload documents, and track the progress of their applications online.

Stage 2: Select the Correct Type of FSSAI License:

After registering, users are able to choose what type of FSSAI (Food Safety and Standards Authority of India) license they require (Basic Registration State License or Central License) according to how big their business is where it is located and on how many people are working for them. Choosing the wrong kind of FSSAI licence may mean delays in processing applications or even having the application rejected.

Stage 3: Complete Online Application Form:

Once a user knows which type of FSSAI License they need, they will fill out either Form A (Basic Registration) or Form B (State and Central License). At this time, the applicant provides detailed information about their business, including the following:

• Business Name and Address
• Type of Food Activities
• Categories of Products
• Capacity to Produce and Store
• Partners/Directors’ Information

Inaccurate information at this point may cause future issues with FSSAI and lead to the rejection or refusal of the application.

Stage 4: Uploading Supporting Documentation:

Stage 4 is one of the critical stages of application processing. The most common types of supporting documentation include:

• Proof of identity and address for each proprietor/partner/director,
• Evidence that the business has commercial premises,
• Current Passport-sized Photograph,
• A list of the food products the business intends to produce and/or sell,
• Floor plan of the processing facility,
• Water Quality Test Report,
• List of Equipment,
• NOC from local authorities, if applicable.

The documentation requirements for obtaining a State License or a Central License differ substantially from Basic Registration.

Stage 5: Payment of the Fees:

Upon completion of the license application form and uploading of supporting documentation, the next stage (stage 5) is payment of appropriate fees online. The specific fee amounts depend on the type of license applied for, and the period of license (1-5 years).

Once the application and fees are submitted, the user will receive a unique application reference number (UARN) to be used for tracking the application.

Stage 6: FSSAI Initial Review:

After the application is submitted, FSSAI will begin the initial review of application. During this review process, FSSAI will verify that the application and any supporting documents provided are correct. Upon completion of this phase, if competent authority finds that additional information is required or submitted application is incomplete, they will send  a request for clarification to be submitted within a specified deadline.

Stage 7: Inspection of Premises (If Applicable):

 The FSSAI officers will conduct an assessment of the business premises for most State and Central licenses on-site. This involves evaluating the following: hygiene, adequacy of infrastructure, storage and handling practices, compliance with safety norms. If any non-compliance is found, that non-compliance must be rectified prior to approval.

Stage 8: Grant of Registration or License:

Once the inspection and verification have shown satisfactory results, a registration certificate or license will be issued by the FSSAI authority with a 14-digit FSSAI number. This certificate must be prominently displayed at the business premises and must also be included on the food packaging.

Stage 9: Validity and Renewal:

Registrations/Licenses are valid for a period of one (1) to seven (5) years. A renewal application should be submitted to the FSSAI at least thirty (30) days prior to the expiration date to avoid any penalties or disruption of operations.

Merits of The Licensing Procedure:

While entering a market, a food business is not simply selling a product, it is establishing a trust-based partnership with its customers. For customers of a food business, confidence is established through mutual trust between all parties concerned. In order for food businesses to have that kind of confidence established with their customers, they must first register with the FSSAI, which is the means by which a food business has established its own confidence with its customers, as it places the food business in an established legal structure that has been built on Indian food safety laws. Registration with the FSSAI protects the food business from being subject to any type of fines or penalties that could arise from a food business not complying with Indian food safety regulations, and gives the food business the opportunity to participate in the market while knowing that they have a legal right to do so, which is one of the biggest advantages to being registered with the FSSAI.

Another major advantage to food businesses successfully complying with FSSAI regulations is the increase in consumer trust that occurs as the company continues expanding its reach into new markets. As consumers have become more informed about the products they buy and the origins of those products, their level of trust in these products has increased. By displaying an FSSAI registration number on food packaging or point of sale displays, a consumer has greater confidence that the food has been inspected by the proper government officials, has passed all safety and health inspections, and meets national safety guidelines. This means that if a consumer is faced with choosing between two products of similar quality, having an FSSAI registration number will often be the determining factor as to which brand they choose. Over time, the trust that consumers have placed in a particular brand will translate into consumer loyalty, an enhanced reputation in the marketplace, and a larger and continually increasing base of customers.

Gaining trust allows the ability to enter into larger and better markets. Many online food platforms, modern retail chains, and institutional customers require compliance with the FSSAI for them to be able to conduct business with those companies. Without an FSSAI registration, the chances of a food business conducting business only locally are very limited. With registration, a business is now eligible to be placed on e-commerce platforms, be on the shelves of supermarkets, enter into bulk supply agreements and possibly even win government tenders. A food business that started off operating out of a small kitchen or a single store now has the potential to grow rapidly and reach customers in multiple cities and states. The FSSAI registration could be the catalyst for the growth of the business and its commercial expansion.

The credibility also extends to financial institutions, such as banks, investors, and venture partners. They are all cautious by nature, but especially so in an industry that carries a high level of safety risk, like the food industry. A business that has been registered, compliant, and operates legally appears more credible, organised, disciplined, and trustworthy. Thus, it is much easier for these businesses to access funding through loans, investment capital, or strategic partnerships.

Furthermore, as the FSSAI compliance guidelines require an operational discipline in a company, the organisations must adopt strong principles of operational discipline. In time, these organisations develop standardised operating procedures, food hygiene protocols, record-keeping systems, and food quality control processes. These measures lead to more efficient production processes, reduced waste, and the development of a professional work culture, resulting in the long-term sustainability of the organisation.

Challenges to Fssai Compliances:

Nonetheless, there are challenges along the way to compliance. For many small and first-time entrepreneurs, the documentation process may seem daunting. A good deal of patience and endurance is often required to understand the regulatory requirements, coordinate the different types of certificates needed, and ensure that all information submitted meets the requirements of the agencies. Even after all the documents are submitted, there may be delays while waiting for approvals. Scheduling inspections, addressing any clarification issues, and taking corrective action on identified deficiencies can all contribute to lag times. Even though the digital approach is used, some of the path to final approval may seem slow and uncertain when an operation is waiting to start production.

Although technology is designed to make things easier for applicants, at times it can make things more challenging for them as well. When applicants use the online Portal to do things such as upload documents or make payment, they often run into technical difficulties. Even the slightest technical issues cause applicants a great deal of stress, especially if they are not experienced in using digital systems.

After applicants have secured their registration, the responsibility does not stop there. Everyday compliance is now part of the applicant’s business. Recurring registration, continuing compliance with safety regulations, and unannounced inspections are therefore an integral part of running a compliant business daily.

Micro and home-based businesses may find that even the most basic registration fee and required updates to the facilities can feel overwhelming as a new venture. There are many costs associated with building a successful business, including water consumption testing, storage enhancements, safety equipment, compliance documentation, etc. Ultimately, all of these costs should not be viewed as regulatory requirements, they are investments into creating a successful, stable, and sustainable business for the future.

Conclusion

FSSAI Registration is the base of India’s Food Safety System. The process aligns business with Public Health. The system for growth and responsibility are connected. It takes time, effort, education and ongoing commitment. It is well worth it for the benefits of consumer trust, access to markets, credibility and being able to run a more efficient business. To survive and grow in a competitive Food Business, FSSAI Registration is not only a legal requirement, it is an investment into trust, quality and long-term growth for a company.

Author: Prahalad Kumar, Co- Author: Sujay Kumar Maitra, in case of any queries please contact/write back to us via email to [email protected] or at IIPRD.