PRESENTATION

ON

INITIAL FACTORY REGISTRATIONS

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Factory Registrations

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• Pollution NoC (NoC to Establish & NoC to Operate)

• Comfort Letter from District Industries Centre

• Fire NoC

• Factory License

• Provident Fund Registration

• Employee State Insurance Registration

• Central Excise Registration

• Standing Orders Registration

Pollution NoC

• The pollution control license (NoC) is granted in two stages:

– Consent to Establish

– Consent to Operate

• Consent to Establish: Under the existing pollution Control Laws,all types of industrial units, before establishing are required toseek CONSENT TO ESTABLISH (NO OBJECTION CERTIFICATE)from environmental pollution angle.

• Consent to Operate: units starting operation after establishingas per NOC issued by the Board have to apply for consent tooperate. Consent to Operate is required to be renewedperiodically depending on the period for which the earlier NoChas been issued.

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• Prior to establishing the industrial unit, letter of comfortfrom the DIC is required to be obtained. This is alsoreferred to as the registration with the IndustriesDepartment.

• For this purpose, the industries are classified into Micro,Small & Medium Scale Industries. Presently units havinginvestment upto Rs. 25 Lacs in Plant & Machinery aretermed as Micro, Rs. 25 Lacs to Rs. 5 Crores as Small andRs. 5.00 crores to Rs. 10 crores as Medium.

• The registration with the DIC helps in giving identificationto the Industries and is also required by some departmentsfor giving clearances and other licenses.

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Registration with District Industries Centre (DIC)

Micro, Small & Medium Enterprise Registration

• The Micro, Small & Medium Enterprise Registration is also referred to asthe MSME Registration.

• MSME Registration is helpful as:

– It is useful in gaining eligibility under government schemes relatingto Guarantee Loan etc.

– It makes it easier to avail government subsidies

– It makes it easier to effect quicker recoveries against the outstandingreceivables from customers by setting time limits under the MSMEAct.

• Though, EM-1 has been abolished, DIC requires MSME registrationdetails prior to setting-up the unit. Hence, the MSME registration can befiled again once the unit is functional with updated details.

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• Fire NOC means No Objection Certificate against Fire Prevention & Protectionsystem.

• Fire NoC is issued by the Fire Department of the respective state in which theindustrial unit is being set-up.

• The Fire NoC is issued in two stages:

– Provisional

– Final Completion

• Provisional Fire NoC is usually issued on submission of the application along withthe Prescribed Documents such as building lay-out accompanied with FireFighting Plan, Site Plan etc.

• Final Fire NoC is issued after satisfaction of the Fire Department as to thecompliance of recommendations stated in the Provisional NoC letter.

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Fire NoC

• Factory License is mandatory before operating any industrial unit.

• The Factory License is also granted in two stages:

– Approval of site / building plan (this requires blueprint of thefactory to be prepared by an architect as per the format requiredby the Factory License issuing authority) &

– Issuance of Factory License

• Like other licenses and clearances, Factory License is also grantedfor prescribed time period and requires renewal regularly.

• Under the existing laws, any unit which is registered under theFactories Act and has been issued a Factory License is not requiredto obtain the registration under the Shop and Establishment Act.

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Factory License

Provident Fund (PF) Registration

• The Employees' Provident Fund and Miscellaneous Provisions Act1952 applies to the whole of India except the state of Jammu &Kashmir.

• The registration requirement arises as soon as the number ofemployees reaches Twenty (20).

• The establishment shall continue to be governed by the PF Law evenif later on the number of employees falls below 20.

• An organization to whom the PF Act is not applicable by reason of itsnumber of employees being below 20 can also voluntarily apply forregistration if the employer and the majority of the employees agree.

• This being a social contribution scheme, both employers andemployees are required to contribute to the Provident Fund at theprescribed percentage.

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• Similar to Provident Fund, Employee State Insurance isalso a social security benefit scheme for the employees.

• The registration requirement arises as soon as thenumber of employees reaches Ten (10).

• W.e.f January 2017, the Act is applicable to employeesdrawing salaries upto Rs. 21,000 per month. Thisamendment has increased the threshold limit of salaryfor applicability of ESIC from Rs. 15,000 to Rs. 21,000.

• Similar to PF, both employees and employers arerequired to contribute to this scheme.

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Employees State Insurance Corporation (ESIC)

Registration

Central Excise Registration

• Central Excise is a duty levied on the manufacture of goods inIndia.

• There is a exemption available to the extent of Rs. 15 Million frompayment of Excise Duty. Accordingly, registration requirement insuch cases also arises only once the aggregate value ofclearances of the manufactured goods from the factory crossesRs. 15 Million.

• However, this exemption is not available to factories which aremanufacturing goods under the brand name / trade namebelonging to others.

• Hence, in case the benefit of the exemption is not available,Excise Duty is required to be charged on all the clearances andaccordingly, registration requirement arises upfront.

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• The standing orders require employers in industrial establishmentsto formally define conditions of employment under them.

• Hence, standing orders means the rules of conduct for workmenemployed in industrial establishments.

• The registration requirement of standing orders arises once thenumber of workman crosses 100.

• The Standing Order Act does not give a clear distinction as towhether the third party workers shall be counted within the meaningof workman for the Act. There have been amendment in IndustrialDispute Acts of some states where the contractor employees havealso been included within the definition of workman.

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Standing Orders Registration

Expected Time for obtaining factory

registrations

Type of registration Expected time*/**

Pollution NoC to Establish Around 1 Month

Comfort Letter from DIC Around 3-5 Days

Fire NoC Around 3-4 Weeks

MSME Registration Around 3-5 Days

Pollution NoC to Operate Around 3-4 Weeks

Factory License Around 1 Month

PF Registration Around 2-3 Weeks

ESIC Registration Around 2 Weeks

Central Excise Registration Around 2-3 Weeks

Standing Order Registration Around 3-4 Weeks

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*Also dependent on time taken to receive documents from the client

**Also dependent on the availability of the concerned officer at the required time

List of documents / information required

Document Pollution NoC to

Establish

Pollution NoC to

Operate

Fire NoC Factory License

PF Registration ESIC Registration

Central Excise Standing Orders

AoA / MoA Y Y Y Y Y

Board Resolution for authorizedsignatory

Y Y

Lease Deed Y Y Y Y

Lease MoU if Lease Deed is notavailable

Y Y

Project Report Y Y Y

PAN of Company Y Y Y Y

PAN of Director & AuthorizedSignatory

Y Y

Report from energy consultantregarding environmental effectsof proposed unit

Y

DD in favour of Pollution ControlDepartment

Y

Chartered Accountant Certificate for Investment in Plant & Machinery in Factory

Y

Report from energy consultantregarding compliance to pointsmentioned in earlier report

Y

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Document Pollution NoC to Establish

Pollution NoC to

Operate

Fire NoC Factory License

PF Registration ESIC Registration

Central Excise Standing Orders

List of Directors and Managerswith father’s name & address

Y Y Y

Copy of Fire NoC Y

Board Resolution for authorizingdirector / other person forapplying for factory license

Y

E-Mail Id’s and Contact Numbers Y Y Y Y Y Y Y Y

Number of workforce for whichlicense is being applied

Y

Generator capacity of factory Y

Photo of Machinery installed infactory

Y

Copy of license fee challan paid toGovernment

Y

Signed Factory License ApplicationForm

Y

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List of documents / information required

Document Pollution NoC to Establish

Pollution NoC to

Operate

Fire NoC Factory License

PF Registration ESIC Registration

Central Excise Standing Orders

Factory layout and blueprint dulysigned by Architect

Y

Building Layout / Site Layout andFire Fighting Plan & letter onletterhead of Companyaccompanied with application formto Fire Department

Y

List of employees with father’sname, salary, date of joining & dateof birth, ESIC Numbers etc.alongwith details of coverableemployees

Y Y

VAT or CST or Indirect TaxRegistration Certificate

Y Y

Electricity Bill for leased premises Y

Cancelled bank cheque Y Y Y

First & Latest bank statement Y Y

Employee strength of companysince starting

Y

Digital Signature Certificate (DSC) ofAuthorized Signatory

Y

Factory License Y

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List of documents / information required

Document Pollution NoC to Establish

Pollution NoC to

Operate

Fire NoC Factory License

PF Registration ESIC Registration

Central Excise Standing Orders

Copy of 1st machinery bill Y

Copy of 1st Sale Bill (if available) Y

List of Machinery in the Factory Y

List of few customers Y

Contractor vendors, number ofcontractor employees, ESICregistration numbers of contractoremployees, ESIC registrationcertificates of contractor vendors &wages disbursed to contractorvendor during previous month

Y

Application on company letterheadfor applying for standing ordersregistration

Y

Five copies of standing ordersprepared by company forregistration

Y

Excise Tariff Codes of Major FinishedGoods & Raw Materials

Y

Area to North/South/East/West ofindustrial unit area

Y

Id & Address Proof of Directorand Authorized Signatory

Y

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List of documents / information required

• Additional documents / information requirement forcomfort letter from DIC & MSME registration:

– Aadhar Number of Resident Director

– Proposed date of commencement of Unit

– National Industries Classification (NIC) code of the majorfinished products to be manufactured (2 digit, 4 digit & 5digit)

– Proposed workforce in the factory

– Proposed investment in the factory in Plant & Machinery

– Total proposed investment in the factory

**Documents mentioned above and in the preceding slides are for general reference. Additional documents maybe asked by the relevant authority as per the facts of the specific case.

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List of documents / information required

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Head Office:16A/20, W.E.A, Main Ajmal Khan Road, Karol Bagh, New Delhi – 110005

T: 011-25722222 / 25732222

Branch:C-102, Sector – 44, Noida – 201301

T: 0120-4311332 / 4579944

Website: www.vvkale.comEmail: vijay@vvkale.com

Independent Member Firm