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Operating Without an FSSAI Licence: Risks and Penalties

Complianceer Team · Aug 20, 2026 · 5 min read

Penalty for running a food business without FSSAI licence in 2026: Section 63 up to ₹10 lakh, other FSS Act penalties, business risks and how to regularise.

Quick answer: Running a food business that needs an FSSAI licence without one can attract a penalty of up to ₹10 lakh under Section 63 of the FSS Act, as amended by the Jan Vishwas Act, 2023 (earlier, up to six months' imprisonment and a ₹5 lakh fine). Separate penalties apply for substandard, misbranded or unsafe food, and repeat offences can double the penalty and lead to cancellation. The fastest fix is to stop guessing, pick the right category and apply on FoSCoS.

Most unlicensed food businesses are not trying to break the law. They started small, assumed registration was optional, or missed that their turnover crossed a threshold. Enforcement does not distinguish between intent and oversight, and marketplaces delist outlets automatically. This guide explains the legal penalties, the practical risks and how to regularise quickly.

What the law says

Section 31(1) of the Food Safety and Standards Act, 2006 says no person shall commence or carry on a food business except under a licence. Section 31(2) lets petty food businesses register instead. Section 63 sets the penalty for carrying on a licensable business without a licence. Persons covered by the registration route under Section 31(2) are excluded from Section 63, but they can still face action under other provisions if they operate without registration or sell non-compliant food.

Key penalties under the FSS Act

Penalties under Sections 50 to 58 are decided by an Adjudicating Officer, who considers factors such as the gain made, the harm caused and whether the offence was repeated.

Business risks beyond fines

• Platform delisting. Swiggy, Zomato, Amazon, Flipkart and quick-commerce apps remove sellers without a valid FSSAI number.
• Closure orders. Food safety officers can issue improvement notices under Section 32, and continued non-compliance can lead to closure.
• Seizure. Products can be seized and samples sent for testing during inspections.
• Lost contracts. Corporate buyers, retailers and franchisors check FSSAI status during vendor onboarding.
• Funding delays. Banks and investors flag missing licences during due diligence.
• Insurance issues. Product liability claims may be harder to defend without a licence.

Common ways businesses fall out of compliance

• Starting to sell before the certificate is issued
• Turnover crossing ₹1.5 crore while still on Basic Registration
• Opening a second outlet under the first outlet's licence
• Not paying the annual fee or filing returns, leading to suspension
• Importing ingredients without a Central Licence
• Brand owners relying only on a contract manufacturer's licence

How to regularise quickly

1. Stop expanding or launching new products until the licence is in place.
2. Confirm the correct category on the FoSCoS eligibility tool.
3. Collect ID, premises proof, product list and category-specific documents.
4. File the application on FoSCoS and pay the government fee.
5. Fix hygiene and labelling gaps before any inspection.
6. Respond to queries quickly and keep a record of all correspondence.
7. Once licensed, set reminders for annual fees and returns.

Be open with your consultant about past trading so the application is accurate. A clean, complete application is the best way to show good faith to the authority.

Staying compliant after the 2026 reforms

Perpetual validity removes routine renewal, but a licence can still be suspended for unpaid annual fees, missed returns or safety failures. Under the new risk-based inspection framework, businesses with poor records are more likely to be inspected. Keep fees paid, returns filed and FoSCoS details current.

Frequently asked questions

What is the penalty for running a food business without an FSSAI licence?

Under Section 63 of the FSS Act, as amended by the Jan Vishwas Act, 2023, carrying on a licensable food business without a licence can attract a penalty of up to ₹10 lakh.

Is operating without FSSAI a criminal offence?

Section 63 was decriminalised by the Jan Vishwas amendment, so it now carries a monetary penalty instead of imprisonment. Selling unsafe food remains a criminal offence under Section 59.

Can a small business be penalised for not having FSSAI registration?

Yes. Petty businesses that must register are excluded from Section 63 but can face penalties under other sections, such as Section 50, where the maximum for petty FBOs is ₹25,000.

Can FSSAI close my restaurant?

Yes. Food safety officers can issue improvement notices, and if they are not complied with, the licence can be suspended or cancelled and the business closed.

What happens if I sell food after my FSSAI licence is suspended?

It is treated as operating without a valid licence and can attract penalties under Section 63, plus delisting from delivery and ecommerce platforms.

How can I get FSSAI registration quickly?

Confirm your category, prepare complete documents and apply on FoSCoS. A complete Basic Registration is often approved within 7 to 30 days.

Official sources

• Food Safety and Standards Act, 2006
• India Code: Food Safety and Standards Act, 2006
• FoSCoS business eligibility tool
• FSSAI FAQs on the 2026 Licensing Amendment Regulations