One of my clients recently had a case which I am explaining below and if you are stuck in such similar situation, here is what to do.
Note: Due to attorney-client privilege, I cannot disclose complete case details or identify the actual parties involved. However, I am sharing the essential facts and legal approach so that if you find yourself in a similar situation, you can understand the available solutions and legal remedies.
TL;DR: For a snack manufacturing business that sells online across states, a Central FSSAI license is mandatory — even if your turnover is below the Rs. 1.5 Crore threshold. A basic registration won’t cover interstate e-commerce. You must disclose a genuine estimate of annual turnover and include all relevant Kinds of Business (KOBs). And yes, you can upgrade your license later via a modification application.
Arvind Tiwari, a third-generation namkeen maker from Nagpur, walked into the Chamber of Advocate Sudhir Rao with a stack of forms and a worried look. The family business — known locally as Tiwari Namkeen — was now being restructured under a new proprietorship, with its own GST registration, and Arvind had plans to sell under the brand “CrunchyVilla” on Amazon and Flipkart. He had also added roasted seeds and trail mix to the product line. A local consultant had told him to simply apply for a basic FSSAI registration and list a few KOBs. That advice, though well-meaning, was dangerously incomplete.
Arvind’s case needed a razor-sharp reading of the Food Safety and Standards (Licensing and Registration) Regulations, 2011. The business was cash-heavy, its actual turnover modest, but the moment he listed products on third-party e-commerce platforms, the license requirement jumped — because interstate supply triggers a central license. The earlier consultant had overlooked this entirely. The office of Advocate Sudhir Rao mapped out every KOB — manufacturer, distributor, wholesaler, retailer, direct seller, and e-commerce — and then structured the application around a single central license from one premises, with a truthful turnover estimate that rested on documented figures and reasonable projections.
The application sailed through. No queries, no rejections. Three months later, CrunchyVilla was live across two platforms, and Arvind’s license already had the built-in flexibility for future turnover upgrades. The whole matter turned on understanding one regulatory nuance that a general practitioner might never flag. That’s where domain-specific experience made the difference.
Key Facts of the Case
- Arvind Tiwari owned a new proprietorship in Nagpur manufacturing namkeen, roasted seeds, and trail mix under the brand “CrunchyVilla.”
- He planned to sell through his own outlet, wholesale, and on third-party e-commerce platforms like Amazon and Flipkart.
- The business was new on paper but had been running for years, with annual turnover well below Rs. 1.5 Crore.
- He wanted to include manufacturer, distributor, wholesaler, retailer, direct seller, and e-commerce as Kinds of Business (KOBs) on the FSSAI license.
- His earlier consultant advised a basic registration, which would have been invalid for interstate e-commerce sales.
- Advocate Sudhir Rao’s office identified that a Central license was mandatory because online sales to multiple states count as interstate trade.
- The application disclosed a genuine estimated turnover and included all KOBs, with a single central license issued for one manufacturing address.
The Direct Legal Answer
Here’s what you need to know, in plain language.
How much annual turnover should I disclose for a new business?
You must state a genuine estimate based on past actuals and reasonable future projections. For a new proprietorship that is, in reality, a continuing family business, use the past year’s approximate sales data as your benchmark. If no records exist, prepare a rough but honest business plan. The FSSAI portal doesn’t demand audited forecasts — but don’t understate turnover to avoid a higher license, because that’s a misdeclaration with consequences later.
Should I select a central license or basic registration for multiple KOBs?
If you sell food products across state lines — whether through your own website or via Amazon, Flipkart, or quick-commerce platforms — you need a Central license. Basic registration (turnover up to Rs. 1.5 Crore) does not permit interstate trade. Even if your annual turnover is modest, the moment supply reaches customers in another state, the central license becomes mandatory. For a single business address doing manufacturing, distribution, retail, and e-commerce, you apply for one central license and select all applicable KOBs. No need for separate licenses.
If I go with a basic registration and turnover increases, can I change the license type later?
Yes. You can file a modification application through the FoSCoS portal to upgrade from basic registration to State or Central license. The upgrade must be done before your turnover crosses the threshold or before you begin interstate sales — operating with an inadequate license is a violation and can attract penalties.
Advice in Such Cases
Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation to come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.
Get your KOB mapping right on day one. Missing a single KOB — for instance, omitting “e-commerce” because you think retail covers it — can disrupt your entire online listing. Also, never rely on a general-purpose business consultant for a regulatory license with this many moving parts. FSSAI compliance has procedural traps that an advocate who regularly handles food licensing will spot instantly. That small upfront clarity saves months of back-and-forth with the authority.
Applicable Sections of Law
The Food Safety and Standards Act, 2006 governs everything. Section 31(1) mandates that no food business operator shall commence or carry on any food business without a valid license or registration. The exact categorization — basic registration, State license, or Central license — flows from the Food Safety and Standards (Licensing and Registration) Regulations, 2011. Regulation 2.1.1 defines the schedule of Kinds of Business. Regulation 2.1.2 lays down the turnover and territorial criteria: basic registration for petty food business (up to Rs. 12 lakh turnover), State license for mid-sized operators operating within one state (Rs. 12 lakh to Rs. 50 crore), and Central license for large manufacturers and all units supplying food across multiple states, irrespective of turnover.
Jurisdiction — Where to File the Case
FSSAI licensing isn’t a court filing — but the jurisdiction of the licensing authority depends on your business scale. For a Central license, the application goes to the Central Licensing Authority designated for your region, usually through the online FoSCoS portal. State licenses are handled by the State Licensing Authority. If a dispute arises — say, a license is wrongly rejected or suspended — an appeal lies to the Food Safety Appellate Tribunal under Section 71 of the Act, and thereafter to the High Court. The territorial jurisdiction for any challenge is where the business is located or where the cause of action arose. Getting the jurisdictional authority right at the application stage avoids delays.
Limitation Period
There is no limitation for applying for an FSSAI license — you can apply when you’re ready to begin operations. But if a penalty order is passed by an adjudicating officer, an appeal must be filed within 30 days from the date of that order under Section 71(1) of the Food Safety Act. The appellate tribunal may condone delays for sufficient cause. For modification or upgrade of an existing license, you should initiate the process as soon as you foresee a change in turnover or business scope, because continuing on an outdated license can invite enforcement action.
Interim Reliefs Available
If a licensing authority issues a suspension or cancellation order, you can file an appeal and simultaneously seek a stay of that order from the Food Safety Appellate Tribunal. While the Act doesn’t explicitly mention “interim relief” in those words, the tribunal has incidental powers to grant stay to prevent irreparable business loss pending the appeal. For example, if your license is suspended the day before a major festival sale, the tribunal can direct the authority to keep the suspension in abeyance. In cases of license rejection, filing a well-grounded appeal along with a stay application often preserves your status until the matter is decided.
If You Are the Victim
- If your license application is wrongly rejected, don’t wait — file an appeal immediately.
- Keep all communication with the licensing authority in writing; never rely on verbal assurances.
- If an inspection happens, ensure you are present with your advocate or an experienced food safety consultant.
- Never surrender your old license until the new one is safely in hand, especially when transitioning a family business.
- Document every single product line and its ingredients before applying, so you can defend your product category if challenged.
Documents You Must Keep Ready
- Proprietor’s identity and address proof — Aadhaar, PAN, and a recent passport-size photo.
- Current GST registration certificate showing the same business address.
- Proof of business premises ownership or a registered rental/lease agreement with a recent utility bill.
- List of all food products to be manufactured and sold, with ingredients and process flow chart.
- Blueprint or layout plan of the manufacturing unit and storage area.
- Water test report from a NABL-accredited lab (mandatory for manufacturing).
- Copy of the earlier family license, if you plan to surrender it or show continuity.
- Bank account details of the proprietorship.
What Evidence Is Required?
- Turnover evidence: previous year’s sales records, GST returns, or a self-declared projection letter.
- KOB evidence: for e-commerce, a screenshot of your seller registration page or an agreement with the platform — this proves interstate intent.
- Product labels and packaging drafts to show compliance with FSS (Packaging and Labelling) Regulations.
- Photographs of the manufacturing unit showing equipment, cleanliness, and pest control measures.
- Medical fitness certificates of food handlers, as required under Schedule 4.
- Certificate of incorporation or shop and establishment registration, if any.
- All email correspondence with the licensing authority — always use tracked mails.
How Courts Typically Approach Such Cases
When FSSAI licensing matters land before the Food Safety Appellate Tribunal or a High Court, the bench usually looks at whether the authority followed the procedural safeguards under the Act and Regulations. Courts are generally not interested in substituting their own judgment on technical compliance unless the decision is arbitrary or violates natural justice. If your application was rejected without a speaking order or without giving you a hearing, that’s a strong ground for interference. But if the rejection is based on a genuine deficiency — like missing documents or an incorrect KOB selection — courts uphold the authority’s call. That’s why getting the application right the first time matters so much.
Timeline of Legal Process
- Application filing: Online submission on FoSCoS — usually takes 1–2 working days to fill completely if documents are ready.
- Scrutiny and inspection: The licensing authority must process the application and, for central license, often directs an inspection within 7–30 days.
- Query resolution: If queries are raised, you get 15–30 days to respond. Missing the deadline can lead to rejection.
- Grant of license: A central license is typically issued within 30–60 days from a complete application.
- Appeal, if rejected: You file before the tribunal within 30 days of the order; the tribunal may schedule a hearing within 2–3 months.
- Final disposal: A well-drafted appeal can be resolved in 6–8 months; a contested matter may stretch beyond a year.
Understanding the Costs
The total cost of a matter like this varies significantly from one case to the next — it depends on the complexity of the dispute, the forum involved, the number of hearings, and the specific facts of your situation. There is no single fixed figure that applies to everyone.
A professional advocate can give you an accurate estimate only after reviewing all your facts and documents in a consultation.
Can the Matter Be Settled Out of Court?
Most FSSAI licensing disputes don’t go to court. If your application is stuck or faces rejection, you can file a representation to the licensing authority and request a personal hearing. That often resolves the matter without a formal appeal. For penalty proceedings under Section 44 of the Act, you can compound the offence — pay a sum and close the matter without court proceedings. Under Section 89 of CPC (if a civil suit is filed), parties can opt for mediation, but that’s rare in pure licensing issues. For a wrong license upgrade, it’s almost always faster to apply for modification than to litigate.
Common Mistakes People Make
- Choosing a basic registration when the business will sell on e-commerce platforms — this is the single most common and most costly error.
- Understating turnover to save the license fee, then getting caught during inspection or GST cross-checking.
- Not mentioning all KOBs; many applicants list “manufacturer” but forget “distributor” or “direct seller,” creating gaps later.
- Letting the old family license co-exist with the new one without proper surrender, causing confusion during follow-up audits.
- Relying on a consultant or advocate who doesn’t regularly handle food licensing — domain-specific experience matters because the regulations have subtle interplays between turnover, KOBs, and interstate trade that a general practitioner may never encounter.
- Ignoring the requirement of a water test report and food handler medicals until the inspection is imminent, leading to last-minute panic and delays.
FAQs People Normally Have
Can I get a single FSSAI license for manufacturing and online selling from one address?
Yes. One central license at your factory address, with all relevant KOBs selected, covers every activity — from retail counter sales to nationwide e-commerce supply.
Is a basic registration enough if my daily production is below 100 kg and turnover is low?
No, if any part of your sale goes to another state, even a single packet. Interstate trade demands a central license, period.
What happens if I list products on Amazon with only a state license?
Amazon and other platforms now insist on a central license for food products being shipped cross-state. Your listing may be delisted, and the licensing authority can initiate enforcement for operating without a valid license.
Can I surrender the old family license and apply for a new one in the new firm’s name?
Yes. Surrender the old license in writing, then apply afresh under the new GSTIN. Don’t let both run simultaneously — it creates compliance clutter.
How long does it take to upgrade from basic registration to state or central?
If your documents are ready and you promptly respond to queries, the upgrade modification can come through in 15–30 days. The portal route is straightforward: modify license → update turnover/type → submit fees → inspection if needed → approval.
This article is general legal information, not legal advice. Consult a qualified advocate about your specific situation.
Advocate Sudhir Rao, Supreme Court of India