TaxTMI 
TaxTMI 
Comprehensive Guide to Legal and Regulatory Requirements for Storage of Chemicals in Warehouses and Godowns in India.
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....omprehensive Guide to Legal and Regulatory Requirements for Storage of Chemicals in Warehouses and Godowns in India.<br>By: - YAGAY andSUN<br>Other Topics<br>Dated:- 26-5-2025<br>Introduction The storage of chemicals-whether hazardous or non-hazardous-is a highly sensitive activity governed by multiple laws in India. Due to the potential risks to life, property, and the environment, businesses operating warehouses or godowns for storing chemicals must secure various permissions and comply with regulatory requirements issued under central, state, and local laws. In addition to industrial safety and environmental clearances, such facilities are also subject to Goods and Services Tax (GST) laws, especially when warehousing is a part of the s....
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....upply chain or involves third-party logistics (3PL). This article provides a comprehensive overview of the approvals, NOCs, consents, and GST compliance required to legally operate a chemical storage facility in India. 1. Central Government Approvals and Regulatory Requirements a. PESO License (Petroleum and Explosives Safety Organisation) If the chemicals stored are inflammable, pressurized, or classified as explosive, licenses must be obtained under: * Petroleum Rules, 2002 * Explosives Rules, 2008 * Static and Mobile Pressure Vessels (Unfired) Rules, 2016 Issued by: Chief Controller of Explosives, PESO Applies to: * Petroleum products * LPG, ammonia, hydrogen, and other compressed gases * Certain solvents and flammable ....
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....chemicals b. Environmental Clearances under the Environment Protection Act, 1986 Applicable Rules: * Manufacture, Storage, and Import of Hazardous Chemicals (MSIHC) Rules, 1989 * Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016 Key Requirements: * Notify local authorities of chemical quantities exceeding thresholds * Maintain updated Material Safety Data Sheets (MSDS) * Prepare On-site Emergency Plans * Conduct periodic Safety Audits Authority: Ministry of Environment, Forest and Climate Change (MoEFCC) and respective State Pollution Control Boards (SPCBs) c. Factories Act, 1948 (if applicable) If any manufacturing or packaging activity is undertaken, or if chemical handling processes qualify ....
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....the facility as a "factory", compliance with the Factories Act is required. Requirements: * Factory License * Approval of building plans * Compliance with safety and health norms Authority: Directorate of Industrial Safety and Health (DISH) or State Labour Department d. Chemical Accidents (Emergency Planning, Preparedness and Response) Rules, 1996 For hazardous chemicals stored above specified limits, companies must: * Notify the District and State Crisis Group * Submit safety reports * Participate in mock drills 2. State-Level Permissions and Approvals a. Pollution Control NOCs (CTE & CTO) All chemical warehouses must obtain: * Consent to Establish (CTE) * Consent to Operate (CTO) These are issued under: * Water (....
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....Prevention and Control of Pollution) Act, 1974 * Air (Prevention and Control of Pollution) Act, 1981 Authority: State Pollution Control Board (SPCB) b. Fire Safety NOC A mandatory Fire NOC must be obtained from the local Fire and Emergency Services Department, especially if flammable materials are stored. Requirements: * Site plan and floor layout * Fire detection and extinguishing systems * Fire evacuation plan * Storage plan and quantities of chemicals c. State Labour License / Shops & Establishments Registration Warehouses are generally required to register under the relevant Shops and Establishments Act of the state, particularly when employing workers. Issued by: State Labour Department d. Industrial Development Autho....
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....rity Approvals In industrial estates, approval from the relevant state industrial authority (e.g., MIDC, GIDC, RIICO, HSIIDC) is required for: * Land allotment * Building plan approval * Utility connections (electricity, water) 3. Municipal and Local Authority Permissions a. Trade License / Storage License Issued by the local municipal corporation or panchayat, a trade license is required to operate a godown or warehouse. b. Building Plan Approval & Occupancy Certificate Before starting operations, you must obtain: * Approval of building plans from the municipal town planning authority * Occupancy Certificate (OC) after construction completion c. Property Tax and Sanitation Clearance Registration under local municipal tax ....
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....departments is also required. Sanitation clearance is especially relevant when chemicals have waste by-products. 4. GST Compliance Requirements Warehousing and storage of goods, including chemicals, fall under the ambit of GST laws, particularly when storage is provided as a service to third parties or as part of the supply chain. a. GST Registration Any warehouse operator engaged in: * Providing warehousing/storage services, or * Supplying stored chemicals as part of taxable transactions must obtain GST registration in each state where the warehouse is located, if turnover exceeds the prescribed threshold. b. HSN/SAC Code * SAC Code 9985 covers "support services in transport", including storage and warehousing. * Applicable G....
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....ST rate is typically 18%, unless the chemicals are essential agricultural commodities (which may be exempt). c. Input Tax Credit (ITC) ITC can be claimed on inputs used in the warehousing activity such as: * Safety equipment * Construction materials * Machinery and electricals * Insurance and rent (subject to conditions) d. E-Way Bills and Invoicing If the warehouse is part of goods dispatch or receipt, proper e-way bill generation and GST invoicing practices must be followed. This includes: * Intra-state movement of goods (beyond threshold distance) * Inter-state transfer between branches or to customers 5. Additional Case-Specific Approvals a. Import/Export Permissions (DGFT and Customs) If the warehouse stores imported....
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.... or export-bound chemicals: * IEC Code (Import Export Code) is mandatory * Bonded warehouse license may be needed under Customs Act (if warehousing duty-unpaid goods) b. Bureau of Indian Standards (BIS) If certain chemicals fall under BIS compulsory certification, ensure compliance before storage or sale. 6. Safety Practices and Recordkeeping Obligations Even after all approvals, the operator must ensure: * Proper labeling and segregation of chemicals * Maintenance of Material Safety Data Sheets (MSDS) * On-site emergency response plans * Worker training in chemical handling and first aid * Regular safety drills and mock evacuations Conclusion Operating a warehouse or godown for chemical storage in India is a compliance-....
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....intensive activity. It involves securing approvals from multiple departments at the central, state, and local levels, in addition to meeting all tax and safety obligations. A systematic approach involving legal, environmental, fire safety, and GST experts is crucial to ensure: * Safe operations * Legal compliance * Risk mitigation Companies should also build robust internal SOPs, conduct periodic audits, and maintain transparency with authorities to sustain long-term operations.<br> Scholarly articles for knowledge sharing by authors, experts, professionals ....