Shops and Establishment

Do You Need A Licence To Sell Diwali Crackers Online In India?

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. But there have been concerns in the recent decades regarding the air and noise pollution created by these crackers. Add 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. 

And 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 a number of shops sell fireworks. Fireworks are considered a low hazard explosive. Its sale is regulated by the Explosives Rules, 2008 framed under Explosives Act, 1884. A licence is required for the possession and sale of fireworks.

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 the 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. 

Other Requirements

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.

Conclusion:

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.

 

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