In this article we are going to discuss the regulatory requirements necessary to manufacture and sell crackers in India.
Diwali is the biggest festival for Indians everywhere. Known as the ‘festival of lights’, a large portion of the population celebrate the festival by bursting crackers. However, there have been concerns in recent decades regarding the air and noise pollution created by these crackers. In this blog, we will know more about the question – Do You Need A Licence To Sell Diwali Crackers Online In India?
Adding to that the phenomena of global warming and vehicular pollution, the government has implemented some regulations in place to make sure that the celebrations are not hindered while ensuring that the environment is not damaged in the process.
While the Supreme Court’s concern for the environment and air quality was laudable, it cannot be ignored that the business of firecrackers is a traditional and legitimate business activity protected under the Constitution of India under the Right to Work. During this season several shops sell fireworks. Fireworks are considered a low-hazard explosive. Its sale is regulated by the Explosives Rules, 2008 framed under the Explosives Act, 1884.
Types of Explosives License
A Temporary Explosives License is issued for a limited duration, typically for short-term or specific purposes. This type of license allows individuals or organizations to handle, store, transport, or use explosives for a temporary period, such as for a specific project, event, or activity. Temporary licenses are often granted with strict conditions and requirements, including safety measures and compliance with regulatory standards. They may be issued for activities like construction, mining, or pyrotechnic displays, where explosives are needed for a limited time.
A Permanent Explosives License is issued for an indefinite period, allowing individuals or entities to handle, store, transport, or use explosives on an ongoing basis. Unlike temporary licenses, permanent licenses provide long-term authorization for activities involving explosives, such as manufacturing, mining operations, or storage facilities. To obtain a permanent license, applicants must meet stringent criteria, including demonstrating expertise in explosives handling, complying with safety regulations, and ensuring proper infrastructure and security measures. Permanent licenses are subject to periodic review and renewal to ensure continued compliance with safety and regulatory standards.
Requirements for Obtaining an Explosives License to Sell Fireworks
- Legal Eligibility: The applicant must be legally eligible to obtain an explosives license as per the regulations set forth by the governing authorities. This typically includes being of a certain age, having no criminal record, and possessing the necessary permits or licenses required for the sale of fireworks.
- Business Registration: The applicant must have a registered business entity, such as a sole proprietorship, partnership, or corporation, recognized by the relevant government authorities. The business should be legally established and compliant with all applicable laws and regulations.
- Safety Measures and Infrastructure: The applicant must demonstrate the implementation of adequate safety measures and infrastructure for handling and storing fireworks. This includes having appropriate storage facilities designed to prevent accidents, fire hazards, and unauthorized access.
- Compliance with Regulations: The applicant must comply with all regulations and standards established by the regulatory authorities governing the sale of fireworks. This includes adhering to guidelines related to product quality, labelling, packaging, and safety standards.
- Training and Certification: Individuals involved in the sale of fireworks must undergo training and certification programs related to the safe handling, storage, and sale of explosives. This ensures that sellers are knowledgeable about proper safety protocols and procedures.
- Inspections and Approvals: The applicant’s premises and operations may be subject to inspections and approvals by regulatory authorities to ensure compliance with safety and regulatory requirements. This includes verifying that the storage facilities meet safety standards and that proper record-keeping practices are in place.
- Insurance Coverage: The applicant may be required to obtain appropriate insurance coverage, such as liability insurance, to protect against potential damages or liabilities associated with the sale of fireworks.
- Application Process: The applicant must complete and submit the necessary application forms along with supporting documentation and fees as required by the regulatory authorities. The application will undergo review, and upon successful evaluation, the explosives license to sell fireworks will be issued.
Mandatory documents required for procuring the explosives license
When seeking an explosives license for the sale of fireworks in India, the application should be accompanied by the following documentation:
- Form 4: Application form for obtaining a license to possess and sell explosives.
- Proof of identity and address, along with recent passport-sized photographs of the applicant.
- Affidavit duly notarised.
- Architect-designed plan of the shop or establishment.
- Evidence of ownership of the shop or establishment.
- If the premises are rented, a No Objection Certificate (NOC) from the property owner.
- Four photographs of the shop or establishment from different angles to demonstrate adequate spacing from neighbouring shops and structures.
- Additional details to be included in the site plan, such as surrounding routes, nearby shops selling fireworks, and the electrical wiring system.
- Demand Draft of Rs. 600 payable at the relevant PESO office, drawn in favour of the Joint Chief Controller of Explosives.
- Any other relevant documents required by law.
Types of fireworks shops?
Some fireworks shops are such that they sell fireworks all year round while some small shops just crop during the season which may be called temporary stalls. Generally, the fireworks shops are classified as:
- Shops for possession and sale of amorces and sparklers only in quantity not exceeding 100 Kgs.- No license is required in such cases
- Temporary shops for possession and sale of fireworks during festival season. A licence in Form LE-5 of Explosives Rules, 2002 issued by the District Magistrate is required
- Permanent shops for possession and sale of fireworks (not exceeding 100 Kgs. of manufactured fireworks and 500 Kgs. of Chinese crackers or sparklers). A licence in Form LE-5 of Explosives Rules, 2002 issued by the District Magistrate is required
- Permanent shops for possession and sale of fireworks (not exceeding 300 Kgs. of manufactured fireworks and 1200 Kgs. of Chinese crackers or sparklers). A licence in Form LE-5 of Explosives Rules, 2002 issued by the Petroleum and Explosives Safety Organization (PESO) is required
What Are The Conditions On The Storage And Sale Of Larger Quantities Of Fireworks:
A firecracker by itself might not be as harmful. But a manufacturing facility that holds large quantities of gunpowder and other volatile chemicals can be a public hazard it not maintained and regulated thoroughly. As per the rules laid down in the Explosives Rules, 2008, a maximum 300 Kgs. of manufactured fireworks and 1200 Kgs. of Chinese crackers or sparklers can be possessed and sold from a shop. The storage of firecrackers is regulated under the Explosives act and has laid down two options for the purpose of maintaining a fire crackers facility.
- Storehouse of fireworks – Maximum up to 5000 Kgs. of fireworks can be possessed in a fireworks storehouse. In order to have possession in the storehouse, one is required to fill in a licence in Form LE-3 of Explosives Rules, 2008. However, a storehouse is not a store. Therefore, fireworks cannot be sold from a storehouse and no licence for a storehouse will be granted unless there is a licensed firework shop as issued by PESO following the format in For mLE-5.
- Magazine of fireworks- Another way to have more than the permissible amount of fireworks is to construct a magazine at a place away from inhabited areas. Depending upon the capacity of the magazine, there are different specified safety distances which are to be mandatorily maintained on all sides. Therefore for e.g. a magazine of capacity 2,00,000 Kgs. of fireworks, 71 metres safety clearance is required to be maintained on all sides. In order to licence a magazine, one is required to obtain a licence in Form LE-3 that is issued in respect of fireworks magazines by the Chief Controller of Explosives of the concerned city.
The documents and formalities required for the possession of a licence to manufacture and sell firecrackers differs from city to city, the standard procedure involves the following steps:
- Obtaining a NOC certificate from the Fire Service Department
- Getting permission from the District Collector or District Police Office.
- Informing the Local Police station and getting permission.
- The needed documents to apply for getting a licence are,
An Application In Form Ae-3
- Five copies of your store construction plan
- DD of Rs. 600 worth of DD should be payable to Joint Chief Controller of Explosives at a location as specified by the respected PESO office which can be located in any part of India.
- Unique signature of the person(s) authorised to sign correspondence
- The nomination of occupier document
- Recently taken passport size colour photos of the occupier(5 copies) with his/her signature on the front
- Copy of photo having ID proof of occupier
- Land documents
The requirements and documents needed for selling Diwali crackers are the same for both selling online and offline. Before proceeding make sure to learn more about Explosives Rules as mentioned by the Petroleum and Explosives Safety Organisation (PESO) regulated by the Govt’s Ministry of Commerce and Industries.
Many of these products that we buy at retail may seem simple in the context of a business plan. You buy them at a wholesale rate and sell them at a retail rate. What we fail to observe and acknowledge is that a lot of due diligence and regulatory thought goes into the forms and formalities that are necessary to start a business. Each business has to be viewed from the point of view of revenue as well as public benefit. So before you decide to start a business, make sure you have consulted a trained professional who is aware of all the intricacies and technicalities of the formalities needed to start a particular kind of business.
How to open a firecracker shop?
Opening a firecracker shop involves multiple steps, including:
- Obtaining legal permits and licenses: This requires knowledge of and compliance with local and national regulations concerning explosives and their sale
- Securing a suitable location: Consider safety requirements, zoning regulations, and accessibility
- Establishing a business entity: Register your business as a sole proprietorship, partnership, or corporation
- Implementing safety measures: Ensure proper storage facilities, fire suppression systems, and security measures
- Acquiring inventory: Research suppliers and choose reputable manufacturers complying with safety standards.
- Understanding market trends and regulations: Stay updated on changing regulations and customer preferences
How much margin does a crackers business have?
Profit margins vary depending on factors like location, customer base, pricing strategy, and operational costs. While it's possible to have high margins during peak seasons like Diwali, the risks associated with the business and potential legal restrictions should be carefully considered.
What is the cost of Diwali crackers?
Prices vary widely depending on type, brand, size, and safety certifications. Green crackers typically cost more than traditional ones due to stricter manufacturing processes.
Which company is best for crackers?
Ranking companies objectively isn't possible, as each prioritises different aspects like safety, variety, or affordability. Researching reputable manufacturers complying with safety standards is crucial.
Can I sell crackers online?
Regulations regarding online sales of fireworks vary significantly by location. Always research and comply with relevant laws before considering online commerce
Which city is famous for firecrackers?
Sivakasi in Tamil Nadu is known as the firecracker capital of India, but due to environmental and safety concerns, the manufacturing and sale of traditional firecrackers are heavily regulated there and in many other parts of the country.