Get A Pan Masala License: A Step-By-Step Guide

The Food Safety and Standards Authority of India (FSSAI) is responsible for issuing licences for the sale of pan masala. In 2018, the FSSAI cancelled the licence of a pan masala manufacturing unit in Tamil Nadu after police seized large quantities of gutkha from the premises. To obtain a licence, registration with the Central Excise Authority is required, and excise duty must be paid in advance every month. Several other industrial licences may also be necessary, including the 2008 Rules for Packaging and Labelling of Tobacco Products and the Regulations for Food Safety and Standards (Packaging and Labelling) of 2011.

Characteristics of Getting a Pan Masala Licence

Registration with the Central Excise Authority is required

To obtain a pan masala license, registration with the Central Excise Authority is required. This is because pan masala falls under the category of "excisable goods", which are produced, manufactured, traded, or held in a private store-room or warehouse. As per Rule 9 (1) of the Central Excise Rules, 2002, "every person who produces, manufactures, carries on trade, holds private storage, or otherwise uses excisable goods shall get registered."

There is no threshold limit for registering with the Central Excise Authority, and registration is required even before production begins. The excise duty must be paid in advance each month before manufacturing and clearances, and the amount depends on the production capacity of the manufacturing machine. To determine the correct amount of excise duty, refer to the 'Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008', which was modified in 2010.

To register, you must follow the conditions, safeguards, and procedures outlined in Notification No. 36/2001-C.E. (N.T.) dated June 26, 2001, as amended. You may also contact the Jurisdictional Assistant Commissioner for guidance on this matter.

In addition to registering with the Central Excise Authority, there are several other industrial licenses that are required to manufacture pan masala. These include:

• The Cigarettes and Other Tobacco Products (Packaging and Labelling) Rules, 2008.
• Prevention of Food Adulteration Act.
• Food Safety and Standards (Packaging and Labelling) Regulations, 2011.
• FASSI & Legal Metrology Rules.

Excise duty must be paid in advance

Excise Duty to Be Paid in Advance

To understand the exact amount of excise duty you will need to pay, you should get in touch with the Jurisdictional Assistant Commissioner. They will be able to provide you with the specific details and calculations regarding the excise duty for your pan masala business.

It is important to note that there is no threshold limit for registration with the Central Excise Authority. This means that you must pay the excise duty and obtain registration before you start producing any pan masala products.

In addition to the excise duty, you will also need to obtain several industrial licences for your pan masala unit. These licences are required to comply with various regulations and standards, such as the Cigarettes and Other Tobacco Products (Packaging and Labelling) Rules, 2008, the Prevention of Food Adulteration Act, and the Food Safety and Standards (Packaging & Labelling) Regulations, 2011.

By following these steps and staying in compliance with the relevant authorities, you will be able to successfully navigate the process of obtaining the necessary licences and registrations for your pan masala business.

Industrial licences are needed

Industrial licenses are needed to start a pan masala business in India. The specific licenses required will depend on the type of manufacturing machine and the scale of production. If you are starting on a small scale, with a small manual machine, a few raw materials, and a packaging machine, you can set up your business on a small plot of land. However, if you are starting on a larger scale, you will likely need a fully automatic machine, which requires a larger space of around 1000 to 2000 square feet.

To obtain the necessary industrial licenses for a pan masala business, you will need to follow the regulations and restrictions outlined by the Indian government. This includes complying with the Industrial Development and Regulation Act (IDRA) of 1951, which mandates that certain industries obtain licenses before establishing their operations. The specific steps for applying for an industrial license are as follows:

• Access the Department for Promotion of Industry and Internal Trade's (DPIIT) G2B portal and click the "Registration" button to initiate the application process.
• Provide the necessary information in the user registration form and continue to the next page.
• Create a user name and password, and accept the terms and conditions. An OTP will be sent to your registered mobile number and email address.
• Complete the form to generate a G2B user ID.
• Log in to the portal using your User Name and Password.
• Click on "Industrial License" to begin the licensing process. You will have the option to select between two types of licenses: IL – Under IDR Act 1951 and IL – Under Arms Act 1959.
• For the IL – Under IDR Act 1951, the first entrepreneur must provide detailed information about the industrial undertaking, existing company activities, foreign investment involvement, and details about Indian/foreign companies/firms.
• Upload the required documents, such as the Certificate of Incorporation, Memorandum of Association (MoA), and Article of Association (AoA).
• After submitting the documentation, pay the application fee by selecting the "Pay Now" option and entering your credit card information.
• Your application will be reviewed by the 'industrial license section' for verification of documents such as the 'Incorporation Certificate', 'Memorandum of Article (MOA)', and 'Article of Association (AOA)'.
• Once the verification is completed and confirmed, the Department will grant the Industrial License through the G2B portal, and a physical copy will be mailed to you.

In addition to the industrial license, there are other regulatory considerations for the pan masala business. These include compliance with the Food Safety and Standards Act, specifically the regulations prohibiting the use of tobacco and nicotine as ingredients in any food products. The FSSAI has issued orders prohibiting the use of these substances in pan masala due to their harmful effects on health.

Adhere to the 2008 Rules for Packaging and Labelling of Tobacco Products

To obtain a licence for selling pan masala, you must adhere to the Cigarettes and Other Tobacco Products (Packaging and Labelling) Rules, 2008. Here are some detailed instructions on how to comply with these regulations:

Firstly, understand the definitions outlined in the rules. For instance, the rules define a "package" as any type of pack intended for consumer sale, excluding wholesale, semi-wholesale, or poora packages if they are not meant for consumer use. The rules also define the "principal display area" based on the type of package, such as box-type, pouch-type, conical or cylindrical, and other forms.

Secondly, ensure that every package of cigarettes or any other tobacco product has the specified health warning exactly as detailed in the schedule of the rules. The specified health warnings should cover at least 85% of the principal display area of the package, with 60% dedicated to pictorial health warnings and 25% to textual health warnings. The warnings should be positioned at the top edge of the package and in the same direction as the information on the principal display area. Make sure that none of the elements of the specified warning are covered, severed, or hidden when the package is sealed or opened.

Thirdly, refrain from inscribing any messages, images, or pictures that directly or indirectly promote tobacco usage or any specific tobacco brand on the tobacco product package. Additionally, do not include any matter or statement that detracts from or contradicts the specified health warning.

Fourthly, ensure that no tobacco product package or label contains false, misleading, or deceptive information that creates an erroneous impression about the characteristics, health effects, or hazards of the tobacco product or its emissions. This includes the use of words or descriptors such as "light", "mild", "low tar", or "slim", as well as any graphics or package design characteristics associated with such descriptors.

Lastly, include the following particulars on every package of cigarettes or any other tobacco product: the name of the product, the name and address of the manufacturer, importer, or packer, the origin of the product (for imports), the quantity of the product, and the date of manufacture. You may also need to include other matters as required by the Central Government in accordance with international practices.

By following these guidelines, you can ensure that your pan masala business complies with the 2008 Rules for Packaging and Labelling of Tobacco Products.

Follow the Act to prevent food adulteration

The process of obtaining a pan masala license involves adhering to regulations outlined by the Food Safety and Standards Authority of India (FSSAI). While the specific requirements for pan masala licensing are still being finalised, there are broader guidelines to prevent food adulteration that must be followed.

The Prevention of Food Adulteration Act, 1954, is comprehensive legislation enacted by the Government of India to curb the widespread issue of food adulteration, which poses serious health risks to consumers. Food adulteration refers to the addition of contaminants or foreign substances to food or beverages, compromising their quality and safety. This practice is often driven by financial motives or, in some cases, manufacturer negligence.

The 1954 Act defines adulteration and outlines the parameters to determine when a food item is deemed adulterated. This includes instances where the product fails to meet established quality standards, contains elements that lower its quality or safety, has been stored or manufactured in unhygienic conditions, or includes any element unfit for human consumption, such as diseased animal products or poisonous substances. The Act also addresses the use of improper colouring agents, prohibited preservatives, or excessive preservatives.

To ensure compliance with the Act, penalties are imposed on vendors found violating these laws. For a first-time offence, this can include imprisonment for 6 months to 1 year or a fine of 2000 rupees. Repeat offences can result in imprisonment of up to 6 years and the cancellation of the vendor's licence. If the adulterated food is found to be injurious to health, the vendor may face punishment under Section 320 of the penal code.

The Act also outlines the responsibilities of the Central Government in preventing food adulteration. This includes establishing a Central Committee for Food Standards, setting up central food laboratories for testing, reviewing the Act's sections, organising training programmes, and approving state PFA rules. The government is also tasked with monitoring the implementation of these rules in states and union territories, conducting exams for appointing analysts, approving infant food labels, and ensuring the quality of imported food.

The Food Safety and Standards Act, 2006, further strengthened the regulatory framework by establishing the Food Safety and Standards Authority of India (FSSAI). This body is responsible for regulating the food industry, setting scientific standards, and overseeing the sale, import, and export of food products to guarantee their safety and suitability for human consumption.

While the specific licensing requirements for pan masala are still being finalised, it is crucial for businesses to adhere to the broader guidelines set out by the FSSAI and the Prevention of Food Adulteration Act, 1954, to ensure the safety and quality of their products.

Frequently asked questions