Central FSSAI License – Penalties for Non-Compliance & Mistakes You Must Avoid
Many business owners delay or ignore central fssai license, thinking they will deal with it later. Unfortunately, regulatory authorities do not share this attitude. Non-compliance with FSS Act, 2006 can result in hefty fines, prosecution, and even business closure.
This article explains the specific penalties you face for non-compliance, plus the most common mistakes businesses make (and how to avoid them).
Penalties Under FSS Act, 2006
The FSS Act, 2006 prescribes the following penalties for non-compliance:
Monetary Fines: Fines typically range from ₹10,000 for minor violations to ₹10 lakh or more for serious or repeated offences. Some penalties are calculated as a daily rate (₹100-₹500 per day of continuing default) with no upper cap.
Late Filing Penalties: If your registration requires periodic filings (annual returns, renewals, etc.), late filing attracts additional penalties. These accumulate daily and can add up to lakhs of rupees if left unaddressed for months or years.
Prosecution: For serious violations, the regulatory authority can initiate criminal prosecution. This can result in imprisonment and personal liability for directors, partners, or business owners.
Cancellation / Suspension: The authority may cancel or suspend your registration, effectively forcing your business to halt operations until compliance is restored.
Disqualification: For company directors, continued non-compliance can trigger disqualification under Section 164 of the Companies Act, 2013. This affects all current and future directorships for a period of 5 years.
Top 5 Common Mistakes Businesses Make
Mistake 1 — Delaying Until a Notice Arrives: Many businesses adopt a "let me wait and see" approach. By the time a notice arrives, penalties have already accumulated. Proactive compliance is always cheaper than reactive compliance.
Mistake 2 — Using Incorrect or Outdated Documents: Submitting expired address proofs, mismatched names on ID documents, or blurry scans leads to rejection and delays. Always use the latest documents and verify consistency across all papers.
Mistake 3 — Hiring the Cheapest Provider: Ultra-cheap service providers often cut corners — using generic templates, missing critical details, or not following up on queries from the authority. This leads to rejections that cost more time and money to fix than hiring a proper professional would have.
Mistake 4 — Ignoring Post-Registration Compliance: Getting the certificate is just step one. Annual filings, renewals, and reporting changes are equally important. Ignoring these leads to the same penalties as not registering at all.
Mistake 5 — Not Maintaining Proper Records: Regulatory authorities can inspect your records at any time. If you cannot produce the required registers, returns, and documents, you face immediate penalties.
How TaxClue Keeps You Penalty-Free
TaxClue provides a Compliance Calendar service for every client. We track every deadline, send timely reminders, prepare all filings, and ensure your business never faces a penalty for missed compliance.
Already facing a penalty or received a notice? Call us at +91 98914 64610 — our team handles notice replies, penalty appeals, and compliance restoration every day.