Drug licence for pharmacies, distributors and cosmetic businesses

Law

Drugs and Cosmetics Act 1940, Rules 1945

Authority

State Drugs Controller; CDSCO for imports

Key forms

20, 21 (retail), 20B, 21B (wholesale)

Validity

Perpetual, with retention fee every 5 years

Which drug licence do you need?

The Rules divide licences by activity and by the schedule of drugs involved. The common ones are:

A typical chemist shop applies for Form 20 and 21 together, and a distributor for 20B and 21B together. Applications for retail and wholesale licences are made in Form 19 to the state drugs control department, most of which now accept them online.

Premises and staff requirements

The licensing authority inspects the premises before granting a licence, so the shop must be ready first. The main conditions are:

• Area: a minimum carpet area of about 10 square metres for a retail or a wholesale licence, and about 15 square metres where both are run from the same premises.
• Storage: a refrigerator for drugs that need cold storage, and an air conditioner where labels require storage below a set temperature.
• Retail: a registered pharmacist must be employed full-time and must personally supervise the sale of prescription drugs. The pharmacist's registration with the State Pharmacy Council is checked.
• Wholesale: a competent person, either a registered pharmacist or a graduate with one year of experience in dealing in drugs, or a matriculate with four years of such experience.
• Legal possession of the premises: ownership papers or a rent agreement, and the site plan.

Several states add their own conditions, such as minimum distance rules for certain categories, signage requirements or a fixed format for the site plan, so we check the current state rules before you sign the lease.

How the licence is granted

1. Preparation: the firm is set up (proprietorship, partnership, LLP or company), the premises fitted out and the pharmacist or competent person engaged.
2. Online application: filed on the state drugs control portal, or on the central online licensing system used by many states, with the documents and the government fee for each form.
3. Inspection: a Drugs Control Officer inspects the premises, checks storage, the area and the competent person, and reports to the licensing authority.
4. Grant: the licence is issued in the relevant forms and must be displayed prominently in the premises.

Where the papers are complete, licences are typically granted within about 30 to 45 days of the application, though this varies by state and by the inspector's availability.

Validity, retention fee and changes

Following the 2017 amendments to the Rules, sale licences no longer expire every five years. They remain valid perpetually, provided the licensee pays the licence retention fee every five years, before the due date. Missing it can lead to the licence being treated as cancelled, and a late fee applies within the grace period allowed.

You must inform the authority, and in many cases obtain a fresh or amended licence, when the pharmacist or competent person changes, the premises shift, a partner or director changes, or the firm is reconstituted. Running the shop without a pharmacist, even for a short period, is one of the most common reasons for suspension.

Cosmetic manufacturing and import

The Cosmetics Rules, 2020 separated cosmetics from drugs. A business that manufactures cosmetics, including one that gets them made by a third-party manufacturer under its own brand, needs a manufacturing licence or a loan licence from the State Licensing Authority. The factory must have the technical staff, testing arrangements and hygiene standards set out in the Rules.

A business that imports cosmetics for sale in India needs a registration certificate from the Central Licensing Authority (CDSCO), applied for on the SUGAM portal. The application lists each brand and product variant and is supported by the manufacturer's authorisation and product information. Customs will not clear consignments of unregistered cosmetics. Labelling must meet both the Cosmetics Rules and Legal Metrology requirements.

Planning a new pharmacy or distributorship

The licence is granted for a specific firm, at specific premises, with a specific pharmacist or competent person, so the order in which you do things matters. A practical sequence is: settle the business structure and PAN, shortlist premises and check them against the area and storage rules, sign the lease, engage the pharmacist, fit out the shop with racks and a refrigerator, and only then apply. Applying before the premises are ready usually leads to an adverse inspection report and a fresh round of paperwork.

Budget for a gap of several weeks between signing the lease and opening, and avoid stocking any drugs before the licence is in hand. Distributors should also check that the manufacturers or stockists they plan to buy from will supply only against a copy of a valid wholesale licence, which reputable suppliers insist on.

Penalties and common mistakes

Selling, stocking or distributing drugs without a licence is an offence under Section 27 of the Act, with imprisonment and fines that increase with the seriousness of the drug involved. Licensing authorities also suspend or cancel licences for breaches found on inspection. The mistakes we see most often are:

• Signing a lease before checking whether the premises meet the area and storage rules.
• Engaging a pharmacist on paper only. Inspectors check attendance and the pharmacist's presence.
• Applying only for Form 20 and then stocking Schedule C or C1 products.
• Selling prescription drugs without prescriptions or without maintaining the required records.
• Forgetting the five-yearly retention fee.

Our professional fee depends on the type and number of licences and the state. The government fee for each form is set by the Rules and we confirm it at the time of filing. Most pharmacies also need GST registration.

Documents you need

For a retail or wholesale drug licence, we usually need:

• Constitution documents of the firm: PAN, partnership deed, LLP agreement or certificate of incorporation
• ID and address proof of the proprietor, partners or directors
• Ownership proof or rent agreement for the premises, and a site plan
• Pharmacist's registration certificate, qualification and appointment letter (retail)
• Competent person's qualification and experience certificate (wholesale)
• Proof of refrigerator and storage arrangements
• Affidavits and declarations in the state's format
• For cosmetics: product list, manufacturer authorisation and label artwork

How we handle it for you

1. Premises review

   We check the area, storage and lease against the current state rules before you commit.

2. Forms and documents

   We identify the right forms and prepare the application, declarations and site plan.

3. Online filing

   We file on the state or CDSCO portal and pay the fees.

4. Inspection support

   We prepare you for the inspection and respond to any observations.

5. After the licence

   We diarise the retention fee and handle changes of pharmacist, premises or partners.

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Frequently asked questions