Benefits of FSSAI License for Small-Scale Food Businesses

22 March 2024

745 8 mins read

The blog explores FSSAI license benefits for small-scale food businesses. They are legal compliance, consumer confidence, market access, process improvement, and food protection.

Table of Contents

Overview:

Food safety is very important for all food businesses. Small businesses can struggle to follow the rules and keep food safe. To help, they can get an FSSAI license from India’s food safety authority. The food industry in India is highly regulated and for good reason. Ensuring food safety is critical for protecting public health and preventing foodborne illnesses. Small food businesses may find it hard to follow regulations and ensure food safety. In this blog, we will discuss how benefits of FSSAI license can help.

Important things to know about FSSAI Registration for Small-Scale Food Businesses

Here are important things to know about FSSAI registration for selling homemade food in India:

Mandatory Registration: All businesses involved in selling homemade food must register with FSSAI or obtain basic FSSAI registration.
Revenue Threshold: If your yearly revenue exceeds Rs 12 lakh, you need to obtain an FSSAI license. The type of license depends on your annual sales.
State and Central Licenses: If your sales are between Rs 12 lakh and Rs 20 crore, you must obtain a state-level FSSAI license. Sales exceeding Rs 20 crore require a license from the Central FSSAI office.
State-Specific Validity: The license issued is valid only in the state where it was obtained and cannot be used in other states.
License Duration and Renewal: FSSAI registration is typically valid for one to five years, and it can be renewed upon expiration. Renewal applications should be submitted 30 days before the registration expires.
Late Renewal Penalty: Late submission of renewal applications may attract a penalty of Rs 100 per day.
Non-Compliance Penalty: Selling homemade food without proper FSSAI registration can lead to penalties of up to Rs 2 lakh as per the Food Safety and Standards Act of 2006.

It’s crucial to comply with FSSAI registration requirements to ensure legal compliance, maintain food safety standards, and avoid penalties.

Key Points to Remember for Small-Scale Food Businesses in India as per FSSAI Standards

Here are key points to remember for a home-based food business in India as per FSSAI standards:

Cleanliness: Maintain a clean and hygienic environment in the area where meals are prepared. Regular cleaning, disinfection, and proper ventilation should be ensured.
Water Supply: Ensure a clean and reliable water supply for food preparation and cleaning purposes.
Utensils and Equipment: Follow proper cleaning procedures to prevent the accumulation of dirt and bacteria on utensils and equipment. Use clean and sanitized utensils for food preparation.
Personal Hygiene: Emphasize personal cleanliness and provide workers with necessary protective equipment like gloves, hats, and clean aprons.
Safe Ingredient Handling: Ensure proper storage and handling of ingredients to prevent contamination and maintain their quality.
Record-Keeping: Maintain records of ingredients, suppliers, and production processes to ensure traceability and facilitate food safety audits.
Allergen Management: Take necessary precautions if your food products contain common allergens, such as nuts or dairy, to prevent cross-contamination and clearly label allergenic ingredients.
Training and Awareness: Train your staff on food safety practices and create awareness about the importance of hygiene and safe food handling.

By adhering to these guidelines, home-based food businesses can ensure compliance with FSSAI standards, and promote food safety, and satisfaction of their customers.

Benefits of obtaining FSSAI Registration for Small-Scale Food Businesses

Obtaining a food license for a small business offers several benefits:

Legal Compliance: Having a license ensures that the food business operates within the legal framework and complies with the food safety regulations set by the government.
Goodwill and Trust: FSSAI registration builds trust and credibility among consumers, as it signifies that the food products meet the required quality and safety standards.
Food Safety Assurance: The FSSAI logo on food products assures customers that the food has undergone necessary quality checks and is safe for consumption.
Consumer Awareness: Displaying the FSSAI registration number at food premises creates consumer awareness and confidence in the hygiene and safety practices followed by the business.
Business Expansion: FSSAI registration is often a prerequisite for expanding the food business, such as opening new branches or entering into contracts with institutional buyers.
Access to Funds: Having an FSSAI license can make it easier for food businesses to attract investments from investors, as it demonstrates compliance with regulatory requirements.

Overall, obtaining an FSSAI license not only ensures legal compliance but also enhances the reputation and credibility of the food business, leading to increased consumer trust and business growth opportunities.

Documents Required For Obtaining the FSSAI Registration/License

The documents required for obtaining FSSAI registration, state license, and central license include:

Photo identity proof of the food business operators.
Business constitution certificate (partnership deed, certificate of incorporation, etc.).
Proof of possession of business premises (rental agreement, NOC from the owner, utility bills, etc.).
Food safety management system plan.
List of food products manufactured or processed.
Bank account information.
Supporting documents like NOC from Municipality/Panchayat, Health NOC, manufacturer’s license, etc.

Specific Documents required for obtaining an FSSAI State License:

Completed and signed Form B.
Plan of the processing unit showing dimensions and area allocation.
List of Directors/Partners/Proprietors with address, contact details, and photo ID.
Equipment and machinery list with capacity details.
Authority letter from the manufacturer nominating a responsible person.
Water analysis report.
Certificate obtained under Cooperative Act/Multi-State Cooperative Act.

Specific Documents required for obtaining FSSAI Central License:

Completed and signed Form B.
Plan of the processing unit showing dimensions and area allocation.
List of Directors/Partners/Proprietors with address, contact details, and photo ID.
Equipment and machinery list with capacity details.
Authority letter from the manufacturer nominating a responsible person.
Water analysis report.
Source of raw materials.
Recall plan (if applicable).
Ministry of Commerce Certificate for 100% EOU.
NOC/PA document issued by FSSAI.
IE code document issued by DGFT.
Form IX.
Certificate from Ministry of Tourism.
Supporting documents for turnover and transportation proof.
Declaration form.

Please note that these documents may vary based on evolving regulations and your specific business as well.

FSSAI License Eligibility

FBOs (Food Business Operators) are required to obtain an FSSAI (Food Safety and Standards Authority of India) license, which can be classified as a State FSSAI License or Central FSSAI License based on the size and nature of the business.

Large manufacturers, importers, exporters, and businesses operating on a large scale need to obtain a Central FSSAI License from the central government. On the other hand, small to medium-sized manufacturing units, transporters, marketers, traders, etc., need to obtain a State FSSAI License from the state government. The turnover criteria for State License is between Rs 12 lakh to Rs 20 crore.

The license is mandatory for various businesses, including manufacturing units with a capacity of 2MT per day, dairy units handling up to 5000 litres per day, 3-star hotels and above, repackers, relabelling units, clubs, canteens, and all catering businesses. The duration of the license can range from a minimum of 1 year to a maximum of 5 years.

To apply for a Central License, the FBO must have a turnover exceeding Rs. 20 crores and operate in multiple states. This license is mandatory for all importers and exporters. The duration of the license can range from a minimum of 1 year to a maximum of 5 years.

Benefits of an FSSAI license

Obtaining an FSSAI license provides several benefits for food businesses in India.

These benefits include:

Having an FSSAI license ensures compliance with the laws and regulations set by the FSSAI, helping businesses avoid legal issues and penalties
An FSSAI license helps build consumer trust by demonstrating that the business meets strict food safety and quality standards
The FSSAI sets standards for food safety and regularly inspects food businesses to ensure compliance, reducing the risk of foodborne illnesses and other safety issues
With a valid FSSAI license, it becomes easier to expand the business to new regions or open new outlets
An FSSAI license can make it easier to obtain loans and other financial benefits for the business

Increased Consumer Confidence:

Getting an FSSAI license can increase customer trust in small-scale food businesses. Customers want to know that their food is safe, and an FSSAI license shows that the business takes food safety.

Obtaining an FSSAI license can open up new markets for small-scale food businesses. This is because many retailers need food products to have this certification. Without it, they may not consider doing business with them. By obtaining an FSSAI license, small-scale food businesses can expand their customer base. Further, they can reach a wider audience. This can help to increase their revenue and grow their business.

Access to More Markets:

Obtaining an FSSAI license grants small-scale food businesses access to more markets. Retailers and distributors often require this license before selling food products. It enables businesses to expand their reach and increase sales and revenue.

Improved Business Processes:

Getting an FSSAI license can improve small-scale food businesses. It leads to better processes, reduced waste, and higher product quality. FSSAI inspection identifies areas that need improvement for better compliance and food safety.

Protection from Food Safety Incidents:

Hence, an FSSAI license can protect small-scale food businesses from food safety incidents. Even with the best processes, accidents can occur. With a license, businesses can show that they have taken necessary precautions to ensure food safety. In the event of an incident, businesses with an FSSAI license are more likely to be viewed favourably. This can help to reduce damage to the business’s reputation and legal risk.

Small-Scale Food Businesses in India Should Obtain an FSSAI License

Small-scale food businesses in India can benefit greatly from obtaining an FSSAI license. This can help them follow food safety regulations, build customer trust, and access new markets. Further, it improves their business processes and protects them from food safety incidents. Further, having an FSSAI license can help businesses stand out. It also gains access to valuable training and resources. It’s important to note that getting an FSSAI license requires ongoing compliance. But, the benefits of doing so can lead to a prosperous future for small-scale food businesses.

FSSAI License Application Process

Obtaining an FSSAI license may seem like a daunting task. But the process is actually quite straightforward. The first step is to determine the type of license needed based on the nature and scale of the business. Then, businesses can apply for the license through the online portal. The application must include various documents and information. They are proof of identity, address, and business registration.

FSSAI License Categories

There are three main types of FSSAI licenses. They are Basic Registration, State License, and Central License. Basic Registration is for small-scale food businesses with an annual turnover of up to Rs. 12 lahks, while State License is for medium-sized businesses with a turnover between Rs. 12 lahks and Rs. 20 crores. Central License is for large-scale businesses with a turnover exceeding Rs. 20 crores.

FSSAI License Renewal and Inspections

As mentioned earlier, obtaining an FSSAI license is not a one-time process. Businesses must renew their license regularly, typically every 1-5 years depending on the type of license. In addition, FSSAI conducts regular inspections to ensure ongoing compliance with food safety regulations. These inspections can be scheduled or unannounced and cover various aspects of the business, such as hygiene, labeling, and storage.

Benefits of FSSAI License for Food Delivery Platforms

Food delivery platforms like Zomato, Swiggy, and Uber Eats require that all food businesses listed on their platforms have a valid FSSAI license. This is to ensure that the food products being sold are safe for consumption and meet regulatory standards. Obtaining an FSSAI license is crucial for small-scale food businesses. It is also important for those selling products online.

FAQs

Is it mandatory to get an FSSAI license for small businesses?

Yes, it is mandatory for all food businesses, including small businesses, to obtain an FSSAI license in India. This applies to manufacturers, traders, restaurants, and other food businesses.

What is the importance of FSSAI in the food industry?

The FSSAI (Food Safety and Standards Authority of India) plays a crucial role in ensuring food safety and quality in the food industry. It sets strict standards for food safety and regularly inspects food businesses to ensure compliance. The FSSAI license helps build consumer trust, reduces the risk of foodborne illnesses, and protects the health of consumers

Is FSSAI registration required for homemade food?

Yes, FSSAI registration is required for homemade food businesses as well. Whether it is a small-scale food business or a larger one, FSSAI registration is mandatory for all food businesses.

Why is a food license necessary?

A food license, such as the FSSAI license, is necessary to ensure compliance with food safety and quality standards. It helps businesses avoid legal action and penalties for non-compliance. Additionally, a food license builds consumer trust, protects public health, and promotes food safety in the industry

Is GST compulsory for food licenses?

No, GST (Goods and Services Tax) registration is only mandatory for businesses with an FSSAI license if their annual turnover exceeds the threshold limit set by the government.

Who is exempted from the FSSAI license?

FSSAI License is not required for those engaged in manufacturing or trading of utensils or packaging material as these are not covered under the definition of food as per Section 3(n) of FSS Act, 2006.

What is the difference between a food license and FSSAI?

The term food license is a general term that refers to the license or registration required for operating a food business. On the other hand, FSSAI (Food Safety and Standards Authority of India) is the regulatory body responsible for setting food safety and quality standards in India.

Conclusion:

Don’t let the complexities of FSSAI registration hinder your business growth. Take action today and partner with Vakilsearch to obtain your FSSAI license hassle-free.

Want to unlock the doors to success for your homemade food business?

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