End-to-End Support by VETRI AUDIT SERVICES PRIVATE LIMITED
Operating a factory in India legally requires strict compliance with the Factories Act, 1948. Two crucial pillars of this compliance are Factory License Renewals and timely submission of Factory Returns. At Vetri Audit Services, we assist factories across Tamil Nadu and other states in navigating these regulatory responsibilities seamlessly.
What is Factory License Renewal?
A Factory License is a legal permit issued by the State Labour Department under the Factories Act, 1948, allowing the operation of a manufacturing facility. These licenses are usually valid for a fixed duration (1-10 years) and must be renewed before expiry to maintain lawful factory operations.
When Should You Renew?
- Renewal applications must be submitted 30 to 60 days before the expiry date.
- Some states (like Tamil Nadu, Maharashtra, and Gujarat) have specific timelines. It's vital to follow your State Labour Department's guidelines.
- Late renewals or operating after license expiry is considered an offence and may attract heavy penalties or closure orders.
Documents Required for Factory License Renewal
Ensure you have the following documents ready:
- Existing Factory License Certificate
- Duly filled Renewal Application (Form 5 / Form 6 as applicable)
- Updated list of employees
- Latest layout plan (if changes are made to the premises)
- Proof of fee payment
- NOCs from Pollution Control Board / Safety Department (if changes occurred)
- Inspection or Compliance Certificates (if mandated)
How to Renew Your Factory License Online
- Visit your respective State Labour Department portal (e.g., TN Labour Portal)
- Login with your factory credentials (ID/Password)
- Navigate to "Factory License Renewal"
- Fill in the required details in the renewal form
- Upload the necessary documents
- Pay the prescribed renewal fee online
- Submit your application
- Download your renewed license certificate upon approval
Renewal Fee Structure
Fees depend on:
- Number of workers employed
- Type and category of industry (hazardous/non-hazardous)
- Applicable state fee structure
Example Fee Ranges:
| Factory Type | Estimated Fees |
|---|---|
| Small factories | ₹1,000 - ₹5,000 |
| Medium factories | ₹5,000 - ₹15,000 |
| Large factories | ₹15,000 and above |
Note: Fee slabs may differ from state to state.
Penalties for Late or Non-Renewal
| Issue | Consequence |
|---|---|
| Late Renewal | Penalty/fine as per local Factory Rules |
| Operating with expired license | Legal action, fines, possible factory closure |
| Chronic Non-Compliance | Possible imprisonment or permanent revocation |
Best Practices for Renewal Compliance
- Set automated reminders 90 days before expiry.
- Maintain all statutory factory documents digitally and physically.
- Track renewal status through the portal.
- Appoint a labour law consultant for periodic compliance reviews.
Understanding Factory License Returns
As per the Factories Act, every registered factory must file periodic statutory returns to the Labour Department or Factory Inspectorate. These returns reflect the factory's compliance with:
- Worker health & safety
- Working hours
- Machinery audits
- Accident and incident tracking
Mandatory Returns & Filing Schedule
| Return Type | Frequency | Purpose | Applicable To |
|---|---|---|---|
| Annual Return (Form 21) | Yearly | Employment stats, working hours, safety data | All factories |
| Half-Yearly Return | Every 6 months | Status of safety measures, injury data | Some states |
| Accident Report (Form 23) | Within 24 hours | Injury, death, or critical incident reporting | All factories |
| Register of Workers | Ongoing | Daily worker attendance and work hours | All factories |
| Health & Safety Reports | Periodic | Health check-up data, hazard compliance | Hazardous industries |
Key Forms Under the Factories Act
| Form No. | Purpose | Frequency |
|---|---|---|
| Form 21 | Annual Return | Yearly |
| Form 22 | Occupation Notice of New Factory | Once (Before Start) |
| Form 23 | Accident Report | Within 24 hours |
| Form 24 | Periodical Test Notice | As Scheduled |
| Form 25 | Register of Adult Workers | Continuous |
| Form 26 | Leave with Wages Register | Continuous |
How to File Returns Online
- Visit the Factory Licensing or Labour Department Portal for your state
- Select the applicable return form
- Enter the required data accurately
- Upload signed documents or certificates
- Submit online and download acknowledgment
Keep physical copies for 5-10 years depending on state mandates.
Penalties for Non-Filing
| Non-Compliance | Penalty |
|---|---|
| Late filing of returns | Fine up to ₹5,000 or legal summons |
| Failure to report accidents | Heavy fines, prosecution, or shutdown orders |
| Poor record maintenance | Inspection failures, compounding charges |
Factory Compliance Tips
- Maintain up-to-date registers (Form 25, Form 26)
- File returns within the prescribed dates
- Train supervisory staff on compliance calendar
- Automate your factory record-keeping using ERP/HRMS tools
- Schedule periodic compliance audits with experts
Need Expert Help with Factory License or Returns?
At VETRI AUDIT SERVICES PRIVATE LIMITED, we offer complete assistance with:
- New Factory License Registration
- License Renewals & Modifications
- Filing Annual, Half-Yearly, and Special Returns
- Accident Reporting Support
- Maintenance of Statutory Registers
- Liaison with State Labour Departments
Contact us today to ensure your factory remains 100% compliant with all applicable laws and avoids any operational risk.
Contact us today for a consultation!
