Food and Drugs Administration, (FDA) Haryana, India. |
Email ID: dahiya19@yahoo.com
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Last Updated on May 20, 2025 by The Health Master
Compounding of Offences
The Drugs and Cosmetics (Compounding of Offences) Rules, 2025, introduced by the Ministry of Health and Family Welfare, streamline legal processes in India’s pharmaceutical and cosmetics sectors with respect to the compounding of offenses.
These rules, published vide notification no. GSR 259(E) on April 24, 2025, in the Gazette of India, provide a legal framework for resolving certain offences under the Drugs and Cosmetics Act, 1940, through compounding, allowing offenders to settle cases without involving into the lengthy procedures of the prosecutions.
Background
The journey of the Drugs and Cosmetics (Compounding of Offences) Rules, 2025, began with a draft published vide notification no. GSR 374(E) on July 10, 2024.
The Ministry of Health and Family Welfare invited public feedback for 45 days, ensuring transparency and involvement of the stakeholder.
After reviewing the objections and suggestions, the Central Government finalized the rules as per the powers under Section 33 and Section 32B of the Drugs and Cosmetics Act, 1940.
These rules aim to reduce the lenghty process of prosecutions and the burden on the courts, as well as ensuring the compliance with regulatory standards for the pharmaceutical, cosmetics and medical devices indutries.
Key Objectives
Simplify Legal Processes: Allow eligible offences to be settled through compounding, avoiding prolonged litigation.
Encourage Compliance: Provide a mechanism for violators to rectify mistakes while maintaining accountability.
Protect Public Health: Ensure that compounding does not compromise the safety and quality of drugs, cosmetics and medical devices.
What Are the Drugs and Cosmetics (Compounding of Offences) Rules, 2025?
The Drugs and Cosmetics (Compounding of Offences) Rules, 2025, gives the details regarding the process for compounding of offences under the Drugs and Cosmetics Act, 1940.
Compounding refers to a legal mechanism where an violators can pay a penalty to avoid lengthy process of prosecution for certain offences.
These rules, effective from their publication in the Official Gazette, apply for those who involved in the manufacturing, import, sale, or distribution of drugs, cosmetics and medical devices,
Definitions
Act: Refers to the Drugs and Cosmetics Act, 1940.
Applicant: Any individual or company engaged in activities covered by the Act, such as manufacturing or importing drugs or cosmetics or medical devices.
Compounding Authority: An officer appointed by the Central or State Government to handle compounding applications.
Reporting Authority: Licensing or approving authorities responsible for overseeing compliance under the Act.
Appointment of the Compounding Authority
The rules empower both the Central Government and State Governments to appoint compounding authorities.
These compounding authorities, who must be at least at the rank of a reporting authority, are responsible for:
- Reviewing applications for compounding.
- Determining the compounding amount.
- Granting or denying immunity from prosecution.
This dual structure ensures that offences are addressed at both national and state levels, depending on the jurisdiction where the violation occurred.
How to Apply for Compounding
Step-by-step procedure:
Submit an Application:
Applicants, whether individuals or companies, must file an application in the prescribed Form (as mentioned in the rules).
This can be done before or after the initiation of prosecution.
Relevant Details:
The application must have relevant detailed information, such as
- Name and address of the applicant.
- Details of the product (e.g., composition, batch No., manufacturing license number etc.).
- Nature of the offence and any prior offences.
- Test reports or certificates of the product, if applicable.
Individual Applications:
Each entity involved in the offence must submit a separate application.
The Application Form: Key Fields
| Field | Description |
|---|---|
| Applicant Details | Full name, address, and contact information. |
| Product Information | Name, composition, and licensing details of the drug or cosmetic or medical devices. |
| Offence Details | Specific contravention of the Act and brief facts of the case. |
| Supporting Documents | Test reports, certificates, or seizure details, if applicable. |
| Declaration | Commitment to pay the compounding amount and acknowledgment that compounding is not a right. |
The Compounding Process
Once an application is submitted, the compounding authority follows a structured process:
Request a Report:
The authority seeks a report from the reporting authority within whose jurisdiction the offence occurred. This report, due within one month (or an extended period if allowed), provides critical details about the violation.
Evaluate the Application:
- The compounding authority reviews the application and the report to decide whether to:
- Approve the application and set a compounding amount.
- Reject the application, providing reasons after giving the applicant an opportunity to be heard.
Issue an Order:
The authority issues an order, a copy of which is sent to the applicant.
Payment of Compounding Amount:
If approved, the applicant must pay the specified amount within 30 days and submit proof of payment.
The amount is non-refundable unless a court rejects the immunity from prosecution.
No Automatic Right:
Applicants cannot demand compounding as a right; the decision lies with the compounding authority.
Immunity from Prosecution:
The compounding authority may grant immunity from prosecution if the applicant:
- Fully cooperates during the proceedings.
- Provides complete and truthful disclosure of facts.
However, immunity is conditional and can be withdrawn if:
- The applicant fails to pay the compounding amount within the stipulated period of time.
- The applicant violates any conditions attached to the immunity.
- The authority discovers that the applicant concealed material facts or provided false evidence.
In such cases, the offender may face prosecution for the original offence and any additional violations uncovered during the compounding process.
Implications for Stakeholders
The Drugs and Cosmetics (Compounding of Offences) Rules, 2025, have implications for the pharmaceutical, cosmetics and medical devices industries:
Reduced Legal Burden:
Companies can resolve minor offences promptly, saving time and resources.
Enhanced Compliance:
The threat of prosecution encourages stricter adherence to regulations.
Transparency:
The requirement for public consultation and clear procedures ensures fairness.
However, stakeholders must remain vigilant, as compounding is not guaranteed, and serious offenses may still lead to prosecution.
FORM: Application for compounding of offences
FORM
(See rule 4)
(Application for compounding of offences)
1. Full name and address of the applicant:
2. Address for communication:
3. Name and composition of the product:
4. Manufacturing License, Import Licence or Registration Certificate details (including address, email and contact details):
5. Manufactured or Imported by:
6. Marketed by,if any:
7. Export or Import code No, if applicable:
8. Certificate of Analysis of Manufacturer or National Accreditation Board for Testing and Calibration Laboratories (NABL) lab, if any:
9. Details of sample, if applicable:
10. Date of sample drawn (Form 17 of Drugs Rules, 1945 or Form COS-10 of Cosmetics Rule 2020 or Form MD-36 of Medical Device Rules 2017):
11. Date of test report received in Form 13 or Form 2 of Drugs Rules, 1945 or Form COS-14 or Form COS-21 of Cosmetics Rule 2020 or Form MD-32 or Form MD-31 of Medical Device Rules 2017, if applicable:
12. The contravention of the provisions of the Drugs and Cosmetics Act, 1940, against which prosecution is instituted or contemplated:
13. Date of seizure, if any:
14. Brief facts of the case and particulars of the offence(s) charged:
15. Whether Show Cause Notice or Chargesheet issued:
16. Whether this is the first offence under the Drugs and Cosmetics Act, 1940, if not details of the previous cases:
17. Whether any proceedings for the same offences contemplated under any other law, if so the details thereof:
Name and Signature of the applicant
DECLARATION:
1. I shall pay the compounding amount, as may be fixed by the compounding authority under the Rule…….. of the Drugs and Cosmetics (Compounding of Offences) Rules, 2025 there under.
2. I understand that I cannot claim, as of right that the offences committed by me under the Act shall be compounded.
Name and Signature of the applicant
Q. What is compounding of offenses under the Drugs and Cosmetics Act?
A. Compounding of offenses allows violators to pay a penalty to settle certain violations under the Drugs and Cosmetics Act, 1940, avoiding the lengthy process of prosecution.
Q. Who can apply for compounding?
A. Any individual or company involved in manufacturing, importing, selling, or distributing drugs or cosmetics can apply for the compounding of offenses.
Q. Can all offenses under the Act is compoundable?
A. No, only specific offenses eligible under Section 32B of the Act are compoundable. The compounding authority reviews each case.
Q. What happens if the compounding application is rejected?
A. The applicant is given a chance to be heard, and reasons for rejection are provided. Prosecution may proceed if the application is denied.
Q. Is the compounding amount refundable?
A. The amount is non-refundable unless a court rejects the grant of immunity from prosecution.
Disclaimer: This article contains information obtained from the source mentioned below. Our team made changes in the format to rewrite and present the news or article in a unique format.
Compiled by:
Rakesh Dahiya, Asstt. State Drugs Controller, FDA Haryana
