FSSAI License for Online Retailers

Ashish M. Shaji

05 Oct, 2020

Just like regular food outlets, online retailers dealing in food also need to get FSSAI License, for selling their products in the market. In this post, we are sharing details of FSSAI License for Online Retailers.

About FSSAI License for Online Retailers

As per the FSSAI directions, online food retailers also need to register their outlet under the Food and Safety Act, 2006^[1]. According to the authority, even if these outlets are dealing through e-commerce platforms, they are associated with food business in one form or the other; hence they need to register themselves with the authority.

Any retailer selling food products using e-Commerce platform or through an actual outlet will have to go for a FSSAI License. This way the outlet gets protection under the law and can also be punished legally. FSSAI in a meeting with food e-retailers, informed them about the significance of having a food license and how it can help protect their interests.

In the past, FSSAI had released directions for e-commerce platforms to de-list the non-licensed or registered food vendors as well as retailers. There must be a legal agreement between the FBOs and the e-commerce platforms to follow food safety and standards regulation.    

Getting food license will help these online retailers assure their customers about the safety of their food products and the ingredients used to produce them.

Site aggregators like Just Dial, Yellow Pages, etc., also list only those food vendors who have food licenses. The information on such vendors is available on these sites.

It is important to note that FSSAI regulations are applicable for centralized registrations of large wholesalers and retailers who have an annual turnover of more than Rs 20 crore. These wholesalers and retailers need to ensure compliance with FSSAI under the following terms:

• Food items need to be packed and labelled with the food license number
• Prescribed quality standards need to be followed
• Records need to be maintained.

If the retailer doesn’t comply with the above and fails to acquire a food license, he will have to pay a fine up to Rs 5 Lakh. He can also be imprisoned for up to six months.

Why do online retailers need to obtain an FSSAI License?

We know that wholesale and retail shops producing and selling food products need to acquire a food license to continue to be in the business, but these days, many online giants have also ventured into the food business. Buyers can buy a variety of food products online. Since these food products are also used and consumed by the buyers, it was imperative to bring these online retailers under the food rules and regulations umbrella. FSSAI has now made it clear that even e-retailers need to acquire registration/license to run a food business. They also need to comply with all food regulations.

How do e-commerce companies work?

Marketplace– Here, the companies work as platform directories or providers for sellers and buyers. They work on the basis of advertising and service charges.
Wholesale/Retailing– This is the platform where wholesalers and retailers sell their products either under their own or some other brand name. They generate revenue from selling goods.
Hybrid– This platform offers a marketplace and here wholesaler/retailer sell their goods and generate revenue from both the sale of goods and service charges.

FSSAI and its Impact on Different Business Models

Marketplace– FSSAI regulations impact different business models in different ways. In the marketplace, there is no direct dealing of food products and the platform is acting solely as a platform or directory where different food vendors along with the products they sell are showcased. Thus, here there is no need for FSSAI Registration. If these directories are also brought under the purview of FSSAI, Google, the search engine giant that allows directories like Zomato need to be brought under FSSAI compliance.

The best that could happen is directories like Yellow Pages and Just Dial show the list of only those vendors who are FSSAI compliant.

Wholesale/Retailing– In this case, wholesalers and retailers need to obtain FSSAI Registration or License under FSSAI whether they are wholesalers, retailers, importers, storing or processing business. The businesses that store food products of more than 50,000 MT also need to acquire an FSSAI license that is available for centralized registrations for wholesalers and retailers with an annual turnover of more than Rs 20 crore. While seeking FSSAI license, these businesses also need to comply with the following requirements:

• Every food product needs to be packed and labelled with information listing ingredients being used, place and date of packing, address, and the name of the manufacturer, marketer and the license number of FSSAI.
• Adhere to the quality standards as prescribed for a variety of food products.
• Quality, quantity, and use of different ingredients.
• Record maintenance, returns filing, and close communication with the authority regarding any modifications or editions in license/registration particulars.

As per FSSAI, if any food business operator or a person (exception- food operators exempt from FSSAI licensing under Sub-section (2) of Section 31 of this Act) himself or by any other operator on his behalf required to acquire a license indulges in manufacturing, selling, storing, importing or distributing any food article without a FSSAI license, he or she shall be punished with six months imprisonment and a fine that can extend to Rs 5 lakhs.

Thus, the e-retailers need to analyze the business models pursued by them and accordingly ensure FSSAI compliance.

Conclusion

The reason behind the introduction of FSSAI regulations was to ensure a high quality of food being sold to consumers. Today when retailers have become an inherent part of our daily lives, buying food, groceries, etc., it has become very important to bring them under a regulatory framework just like local food vendors. Acquiring FSSAI registration or license ensures the quality of food and protection of food vendor’s rights against false accusations.

Do you wish to register for FSSAI License? Are you looking for a food license advisory? Would you like to know about the FSSAI laws? Please feel free to contact Enterslice, India’s leading online legal and tax advisory firm.

Read our article: Advantage & Disadvantages of Online Food Business