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License for cosmetics Business
FDA Approval
Licence from FDA ( Food and Drugs Administration) for hand made cosmetics which has to be approved by Central Licensing Approving Authority.
Handmade Soap is used for cleaning hands hence falls into the category of cosmetics as per Drugs and Cosmetics Act 1940 and Rules 1945 – Section 3 (aaa). This means you are entering the personal care space in India which requires approval.
Handmade and factory made cosmetics manufactured need permission and licens from Drug Control And Environmental Regulations.
The necessary laws are Federal Food, Drug, and Cosmetic Act (FD&C Act) and the Fair Packaging and Labeling Act (FPLA).
For all such licences and information on how to proceed consult with a lawyer. You can also meet local health officials.
They are the ones enforcing these laws and can assist you.
Trade Licence
Another license to be acquired is the trade license. This can be obtained from the municipal corporation. This licence allows you to carry on trade at premises.
Organic Certification
If the soap has organic ingredients you need to get Organic certification.
Another interesting thing I found online is that to obtain these licenses you must have had chemistry as a subject in 12th or have a diploma in pharmacy. You need to check with your lawyer or the State Drug authorities ( they issue the license) or the local health officials.
Another way to obtain a license if you have no degree in chemistry or pharmacy, you tie up with a chemist who has the license. The Chemist can produce the products for you.
Soap making involves lye a chemical and a process called saponification. Lye is a dangerous chemical. There are safety concerns regarding handling lye, using it. You cannot simply discard any waste into the drainage. I guess that is why they are stressing on having a chemist or pharmacist on board.
Since this is a cosmetic business you must charge GST of 18%.
Another source of information would be to contact institutes which have courses in cosmetology. They can guide you in this process.
Shop Licence
If you plan to have a physical shop you would require a licence under shops and establishment act.
Basically you need to register your business, you need a VAT registration as well.
Other Important Documents
Trademark – If you do not want your name copied it is important to obtain a trademark registration.
Trademark registration ensures that your brand name is never copied. You have built that brand and you do not want others to take credit for it nor sell spurious products under your brand name.
eCommerce Business Legal Issues– Register a Domain name and trademark it from a National Registry.
As per Section 43A of the Information Technology Act, 2000 you require a Privacy policy else you can be sued. Basically, the privacy of the people coming to your website needs to be safe and they need to know if you are collecting data or storing their personal information.
Your eCommerce portal must have a Terms and Conditions page.
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