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Legal Requirements for Producing or Selling Oxygen in India

With the coming of the second wave of the novel Coronavirus, the country witnessed a huge surge in the demand of the Oxygen. There are basically two types of oxygen uses in the country; one is Industrial Oxygen and other is Medical Oxygen.



The Industrial Oxygen is used mainly for the industrial plant like that of steel plants in the process of oxidation, cutting, chemical reactions. That sought of oxygen is impure for the use of medical uses and thus is not fit for the human use. On the other hand, Medical Oxygen is pure in nature and can be used for the medical treatment.


The production, sale, distribution and supply of the oxygen is governed under the Drugs & Cosmetic Act of 1940 (“the Act”). The Drugs Controller General of the India has the authority for the approval of all the licenses of the specified categories of the Oxygen. Under Section 5, Section 7 of the Act, the Central Government has formed the rules named as the Gas Cylinder Rules of 2004 (“the Rules”) which regulate, transport, costs, import, export of oxygen. The said Rules also provide a safety framework with regard to the transport, filling and the import. The manufacturer of various type of the Oxygen should have a valid licence issued from the competent State Drug Controller as per the Act 1940 and all the rules and regulation mentioned therein. The prescribed standard operating procedure should be followed with regard to the sampling, testing, records, and procurement of the raw material to delivering of the final product.


On 22nd April 2021, the Ministry of Home Affairs (“the MHA”) has issued an order invoking Section 10(2)(1) of the Disaster Management Act 2005 which provides for “no restriction of the interstate and intra state movement of person and goods for the purpose of free movement of medical oxygen”. further, On 25th April 2021, an order was again issued by MHA in which it was directed that “no liquid oxygen will be supplied to any industries except for the medical purposes”.


Types of Oxygen Plants that can be opened in India: There are two types of Oxygen Plants that can be opened;

  1. Oxygen Manufacturing Plant (requires High Investment)

  2. Oxygen Refill Plant (required Low Investment Plant)

Requirements for setting up the Oxygen Manufacturing Plant:

  • Large Land Space

  • Licenses mandated under Drugs & Cosmetic Act, 1940

  • GST Registration

  • Medical License for the supplying the oxygen to hospitals

  • ISO Certification

  • NOC from the Municipal Corporation of the Area (If land is in a village then from the local panchayat and the Revenue Department of the district)

  • A Technical Expert as prescribed under the Act

Requirements for setting up the Oxygen Refilling Plant:

  • Small location

  • Licenses mandated under Drugs & Cosmetic Act, 1940

  • ISO Certification

  • NOC from the Municipal Corporation of the Area (If land is in a village then from the local panchayat and the Revenue Department of the district)

  • A Technical Expert as prescribed under the Act

Licenses/ Approvals/ Compliances required for setting up an Oxygen Plant

  • Trade License: From the Local Authority of that concerned district.

  • Factory License: From the Chief Inspection of the Factories, State Government under the Factories Act

  • Power Load: Respective Power Distribution Company

  • NOCs: Fire Safety, Pollution Board, Village Panchayat

  • GST Registration

  • Hydro Test Certificate

  • Third-Party Inspection Certificate

  • Other compliances as specified under the Drugs and Cosmetic Act 1940

Marketing Rights:Both the Industrial and Medical Oxygen can be distributed and/ or marketed by a simple tie up with hospitals, NGOs, Government Agencies etc.


Please feel free to get in touch if you have any doubts or need clarifications.


We wish you luck for your business. Happy Reading!


Regards,

AYTA Business Consultants | connect@ayta.in | +91 70246 21120

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Author: AYTA


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