Running a Food Business Without an FSSAI Licence: the Penalties Under the FSS Act

Run a food business without the FSSAI licence the law asks for, and the money exposure today is a penalty of up to ₹10 lakh under section 63 of the Food Safety and Standards Act, 2006. No jail. That changed on 7 November 2023, and half the guides on the internet have not caught up — some still promise you six months in prison, others quote ₹5 lakh, and a few quote ₹10 lakh without telling you why the number moved. Here is the position as the Act stands now, who it actually covers, and what else lands on your desk alongside the penalty.

The rule you break first: section 31

Section 31(1) is blunt. No person shall commence or carry on any food business except under a licence. Manufacture, processing, storage, sale, distribution, catering, import — if food passes through your hands as a business, the section is talking to you.

Section 31(2) then carves out the smallest end of the trade. A petty manufacturer who makes and sells his own food, a petty retailer, a hawker, an itinerant vendor, a temporary stall holder, a small-scale or cottage unit and other tiny food operators do not need a licence. They are not excused from the system, though. They must register. Licence or registration — one of the two has to exist before the first sale, and which one you need turns on your turnover and the kind of business you run.

What section 63 says today — and what it used to say

Section 63 is the provision aimed squarely at trading without a licence. It covers a person or food business operator who, being required to obtain a licence, manufactures, sells, stores, distributes or imports any article of food without one — personally or through someone acting on his behalf. It expressly leaves out the section 31(2) group, because that group was never meant to hold a licence in the first place.

The confusion starts because section 63 has lived two lives:

The change came through the Jan Vishwas (Amendment of Provisions) Act, 2023, which rewrote the penalty provisions of the FSS Act along with dozens of other laws, and the food-safety amendments took effect on 7 November 2023. Parliament's direction was deliberate: take the jail term out of a licensing default, and make the money hurt more instead. So if a guide tells you ₹5 lakh and six months, it is quoting the old text faithfully — it is simply out of date. If another guide says ₹10 lakh, that is the current figure, though many of those guides still wrongly call it a fine attached to a prosecution. Since November 2023 it is a penalty, decided through adjudication, not a sentence handed down after a criminal trial.

One more thing worth knowing. Section 63 bites even if your food is perfectly safe. The offence is trading without the permission, not trading badly. It works the way driving without a licence works: the traffic police do not have to prove your driving was dangerous, because being on the road without a licence is the offence in itself. A spotless kitchen, happy customers and five-star reviews are no defence to a section 63 penalty.

Who fixes the amount, and on what basis

"Up to ₹10 lakh" is a ceiling, not a tariff. Penalties under this chapter are adjudged by an Adjudicating Officer — an officer not below the rank of Additional District Magistrate, notified by the State Government — and section 49 tells that officer what to weigh:

• the amount of gain or unfair advantage you made from trading unlicensed, where that can be counted;
• the loss caused, or likely to be caused, to any person;
• whether the contravention is repetitive;
• whether it happened without your knowledge; and
• any other relevant factor.

Read that list the way an officer would. A home baker who sold for three weeks before anyone told her a registration existed sits at one end. A packaged-food manufacturer who traded for two years, supplied retail chains and kept going after a first warning sits at the other. Same section. Very different cheques.

The petty operator question, answered honestly

If you belong to the section 31(2) group — the petty and tiny operators who need registration rather than a licence — section 63 does not apply to you. The section says so itself. So what happens if you never registered at all?

Here I have to be straight with you, because most articles invent certainty at exactly this point. The Act does not carry a separate, named penalty for trading without registration the way section 63 names the licence offence. What the Act does contain is section 58, a residuary provision: a contravention for which no specific penalty is provided elsewhere carries a penalty that may extend to ₹2 lakh. That is the provision enforcement falls back on for an unregistered petty operator, and it is how I would plan if I were advising one — but plan knowing it is a fallback reading, not a section with your name on it.

Two smaller provisions still reach the petty tier directly. Under section 50, selling food that is not of the nature, substance or quality the purchaser demanded carries a penalty up to ₹5 lakh for licensed operators — but the proviso caps the same default at ₹25,000 for section 31(2) persons. And registration is not a paper shield against the Food Safety Officer: directions issued under the Act bind registered operators too, and ignoring them has its own penalty under section 55, up to ₹2 lakh.

Not the same offence: the penalties people mix up with this one

Search results blur four different defaults into one scary number. Keep them apart:

Notice what this means in practice. An unlicensed unit selling substandard food is not facing one penalty chosen from a menu. It is exposed under section 63 for having no licence and under section 51 for the food itself, and the two proceedings are separate. The licence default is usually the easiest one for the department to prove — either the licence exists or it does not.

The same honesty applies at the information end. If, in the course of all this, a person gives information or produces a document he knows is false or misleading, section 61 now carries a penalty up to ₹10 lakh as well — it was decriminalised on the same date, on the same logic. Borrowing a relative's licence number for your invoices falls in that territory, and it converts one problem into two.

The penalty is not the only cost: notices, suspension, closure

Money is the headline. It is rarely the whole bill.

Section 32 arms the Designated Officer with the improvement notice. Where he has reasonable ground to believe a food business operator has failed to comply with the regulations, he can serve a notice that states the grounds, spells out the failure, lists the measures needed and gives a reasonable period — never less than fourteen days — to take them. Fail to comply and the licence may be suspended. Still fail, and after a chance to show cause, it may be cancelled. Where public health demands it, a licence can be suspended at once, with reasons recorded in writing. An operator who has no licence to suspend should not feel clever about this: the same machinery is what stands between an applicant and the grant, and a record of defaults follows the business into every later application.

There is a sharper edge after a conviction. Under section 33, where an operator is convicted and the court is satisfied a health risk exists in the business, the court can prohibit the use of the process, the premises or the equipment for that food business — or for any food business at all — and can bar the operator from participating in the management of a food business. Knowingly defying a prohibition order is itself punishable with a fine up to ₹3 lakh. For a cloud kitchen running out of a rented unit, a premises prohibition is the business ending, whatever the penalty cheque said.

Already trading without one? Do these things, in this order

1. Work out which tier you actually belong to. Registration, State Licence or Central Licence is decided by turnover and kind of business — since 1 April 2026, Basic Registration runs up to ₹1.5 crore of turnover, a State Licence covers ₹1.5 crore to ₹50 crore, and a Central Licence applies above that, with categories like importers and e-commerce operators in the Central net at any turnover. Our guide to Basic Registration, State Licence and Central Licence under the 2026 rules walks through the bands.
2. Apply on FoSCoS before you trade another day. Every day of unlicensed trading is a fresh day of exposure under section 63, and the section 49 factors — gain made, repetition — only grow. The step-by-step FoSCoS application walkthrough takes you from login to the 14-digit number.
3. Do not paper over the gap. No borrowed licence numbers, no backdated documents, no printing a number you have merely applied for as if it were granted. Section 61's ₹10 lakh penalty for false information is how a fixable licensing default turns into something uglier.
4. If a notice or a penalty proceeding has already reached you, answer it on time and in writing. The section 49 factors reward the operator who can show the default was brief, unknowing and already cured — but only if that story is on the record.

The licence itself is not expensive. The registration fee is ₹100 a year, State Licences run on annual fees in the low thousands, and even a Central Licence costs ₹7,500 a year in government fee. Set that against a ₹10 lakh ceiling and a business that can be stopped at the premises, and the arithmetic is not close. If you would rather have the tier checked and the application filed cleanly the first time, look at our FSSAI registration and licensing service — and if a notice has already arrived, bring it to us before you reply, not after.