Casela Advisors

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Manufacturing Industry Compliance & Advisory Services in India – Factory Licensing, Labour Codes, Pollution Consents (CTE/CTO), GST, PLI Incentives, EXIM & Section 115BAB Tax Structuring

Manufacturing is the most regulation-dense sector in India — a single plant must simultaneously satisfy company law, the Factories Act 1948, the four new Labour Codes, environmental clearances under the Water Act 1974 and Air Act 1981, indirect tax under GST, customs and foreign-trade rules under the DGFT / Customs Act 1962, product-quality regimes under BIS and Legal Metrology, and a web of incentive schemes such as the Production Linked Incentive (PLI) and state industrial subsidies. Getting any one of these wrong can stall production, trigger penalties, or forfeit a tax holiday.

Our manufacturing advisory practice gives promoters, plant heads, and CFOs a single team for the entire lifecycle — greenfield factory setup and licensing, labour and payroll compliance under the new codes, pollution-control consents (Consent to Establish / Consent to Operate), GST structuring, e-invoicing and input-credit optimisation, Section 115BAB concessional-rate planning, PLI and subsidy claims, EXIM / IEC and customs advisory, cost records and cost audit, transfer pricing for MNC plants, and M&A or restructuring. Whether you are commissioning a new unit, expanding across states, transitioning to the Labour Codes, or responding to a pollution board notice, we make compliance a competitive advantage rather than a cost.

Factories Act
Factory Licensing
4 Codes
Labour Law Compliance
Sec 115BAB
15% Tax Regime
PLI
Incentive Advisory
Laws & Frameworks We Work Under
Factories Act 1948
Code on Wages 2019
OSH Code 2020
Social Security Code 2020
IR Code 2020
EPF & ESI
Water & Air Acts
Hazardous Waste Rules 2016
EIA 2006
GST & e-Invoicing
Sec 115BAB
BIS / QCO
Legal Metrology 2009
Customs & IEC (DGFT)

Manufacturing Engagements We Handle

Setup

New Factory Setup & Licensing

End-to-end commissioning of a new unit — entity, land, factory plan approval, factory licence, and the full first-year statutory registration stack.

  • Factory licence (Factories Act)
  • Building / layout plan approval
  • Fire NOC & boiler registration
  • EPF, ESI & PT registration
  • GST & IEC registration
  • Trade & municipal licences
Labour

Labour Code Compliance

Transition from the legacy 29 labour laws to the four consolidated codes — policy, wage-structure, and registers re-built for the new definitions.

  • Wage re-structuring (50% rule)
  • Contract labour licensing
  • OSH registration & safety
  • Gratuity & PF re-working
  • Standing orders & HR policy
  • Returns & e-registers
Environment

Pollution & Environmental Consents

Consent to Establish and Consent to Operate from the State Pollution Control Board, plus waste-management authorisations and EPR registration.

  • Consent to Establish (CTE)
  • Consent to Operate (CTO)
  • Hazardous waste authorisation
  • EPR registration (plastic / e-waste)
  • EIA / environment clearance
  • Annual environmental returns
Tax

GST & Direct Tax Structuring

Indirect-tax efficiency on inputs, capital goods, and inter-state stock transfers, plus access to the concessional corporate-tax regime for new manufacturers.

  • Input tax credit optimisation
  • e-Invoicing & e-way bill
  • Inverted-duty refunds
  • Sec 115BAB 15% planning
  • Additional depreciation (Sec 32)
  • Capital-goods credit planning
Incentives

PLI & Subsidy Advisory

Identifying and claiming central PLI benefits and state industrial incentives — eligibility mapping, application, and disbursement-stage compliance.

  • PLI scheme eligibility
  • Application & documentation
  • State capital / power subsidy
  • SGST reimbursement claims
  • Investment-threshold tracking
  • Claim audits & certification
EXIM

EXIM, Customs & Quality Orders

Import-export structuring, duty optimisation, and compliance with mandatory product-quality control orders before goods can be sold or shipped.

  • IEC & AD-code setup
  • Customs duty & HSN classification
  • Advance Authorisation / EPCG
  • RoDTEP / Duty Drawback
  • BIS / QCO certification
  • SEZ / EOU structuring

Key Manufacturing Concepts You Must Know

Factories Act

Factory Licence

Any premises using power with 10-plus workers (or 20-plus without power) needs registration and a licence under the Factories Act, renewed periodically by the state factory inspectorate.

State Licence Worker Threshold
Labour Codes

The Four Codes

29 central labour laws are being subsumed into the Codes on Wages, Industrial Relations, Social Security, and Occupational Safety — changing wage definition, PF base, and gratuity.

50% Wage Rule Single Registration
CTE / CTO

Consent Mechanism

A factory needs Consent to Establish before construction and Consent to Operate before production, granted by the State Pollution Control Board under the Water and Air Acts.

SPCB Approval Red/Orange/Green
Sec 115BAB

Concessional 15% Regime

An optional 15% corporate-tax rate for eligible new domestic manufacturing companies, subject to the commencement timelines and conditions in the section.

15% Rate Conditions Apply
GST ITC

Input Tax Credit

Credit of GST paid on raw material, capital goods, and input services — subject to Section 16 conditions, supplier compliance (GSTR-2B), and Section 17(5) blocked credits.

Sec 16 Credit GSTR-2B Match
IEC / Customs

Import-Export Code

An Importer-Exporter Code from DGFT is mandatory for cross-border trade, alongside correct HSN classification, valuation, and duty-saving export-promotion schemes.

DGFT IEC Duty Schemes
BIS / QCO

Quality Control Orders

A growing list of products cannot be made, imported, or sold without an ISI mark under a Quality Control Order — compulsory BIS certification before market access.

ISI Mark Mandatory Cert
EPR

Extended Producer Responsibility

Producers of plastic packaging, e-waste, batteries, and tyres must register on the CPCB EPR portal and meet annual recycling / collection targets.

CPCB Portal Recycling Targets

Our Manufacturing Advisory Services

01

Factory Setup & Licensing

Entity formation, factory plan approval, factory licence, boiler / fire NOC, and the complete first-year registration roadmap for a new plant.

02

Labour & Payroll Compliance

Labour Code transition, wage restructuring, EPF / ESI / PT, contract-labour licensing, standing orders, registers, and monthly payroll compliance.

03

Environmental & Pollution Consents

CTE / CTO, hazardous-waste authorisation, EPR registration, environment clearance, and annual environmental statement filings.

04

GST Advisory & Litigation

Registration, ITC optimisation, e-invoicing, inverted-duty refunds, classification opinions, and representation in audits, notices, and appeals.

05

Direct Tax & 115BAB Structuring

Corporate tax planning, Section 115BAB eligibility, additional depreciation, tax audit, advance tax, and assessment representation.

06

PLI & Subsidy Advisory

Scheme-eligibility mapping, application filing, investment tracking, claim preparation, and certification for central and state incentives.

07

EXIM, IEC & Customs

IEC setup, HSN classification, Advance Authorisation / EPCG, RoDTEP, duty drawback, SVB, and SEZ / EOU structuring.

08

BIS & Legal Metrology

BIS / ISI certification under Quality Control Orders, Legal Metrology registration, and packaged-commodity declaration compliance.

09

Cost Records & Cost Audit

Maintenance of cost records under Section 148, cost-audit applicability assessment, and filing of Form CRA-2 / CRA-4.

10

Transfer Pricing

Benchmarking, Form 3CEB, Master File and CbCR for MNC manufacturing units, plus management-fee and royalty documentation.

11

Internal Audit & SOPs

Plant-level internal audit, inventory and procurement controls, standard operating procedures, and management-reporting frameworks.

12

M&A & Restructuring

Slump sale of a plant, demerger of a division, group consolidation, and due diligence for acquisitions or joint ventures.

When a Manufacturing Business Needs an Advisor

Greenfield Plant Setup

Commissioning a new unit needs land, plan approval, factory licence, pollution consents, and a dozen registrations sequenced correctly to avoid delays.

Multi-State Expansion

A second or third plant means fresh state-wise GST, factory, labour, and pollution registrations — each with different state rules and timelines.

Labour Code Transition

The shift to the four codes changes wage definition, PF base, and gratuity exposure — payroll and HR policy must be re-engineered before notification.

Pollution Board Notice

A show-cause, closure direction, or environmental-compensation demand from the SPCB needs an urgent, technically sound response.

GST Audit / Scrutiny

ITC mismatches, classification disputes, or inverted-duty refunds frequently trigger departmental scrutiny requiring reconciliation and representation.

PLI Application Window

PLI schemes have narrow application windows and strict investment / output thresholds — eligibility and documentation must be prepared in advance.

Import-Cost Optimisation

Rising input costs and duty changes make EPCG, Advance Authorisation, and correct HSN classification material to plant profitability.

Cost-Audit Applicability

Crossing turnover thresholds in regulated / specified industries triggers mandatory cost records and cost audit under Section 148.

Documents Needed for a Manufacturing Engagement

Corporate & Licensing

  • Certificate of Incorporation, MOA / AOA
  • Factory licence & plan approval
  • Fire NOC & boiler certificate
  • GST & IEC certificates
  • EPF / ESI / PT registrations
  • Pollution consents (CTE / CTO)
  • Trade & municipal licences

Financial & Tax

  • Audited financials (3 years)
  • Income-tax returns & assessments
  • GST returns & reconciliations
  • Cost records (if applicable)
  • Fixed-asset & capex register
  • PLI / subsidy claim records
  • Transfer-pricing documentation

Operational & Compliance

  • Production & capacity data
  • Wage registers & muster rolls
  • Contract-labour licences
  • Hazardous-waste / EPR records
  • Material & vendor contracts
  • Import-export documents
  • Safety & audit reports

Our Manufacturing Engagement Process

1

Diagnostic & Mapping

Plant walkthrough, statutory-register review, and a compliance gap-analysis across factory, labour, environment, tax, and EXIM.

2

Roadmap & Registration

Sequenced action plan, licence / consent applications, and registration of the full statutory stack with target dates.

3

Structuring & Claims

Tax-regime selection, GST and ITC optimisation, and PLI / subsidy eligibility and claim preparation.

4

Filings & Representation

Periodic returns, cost / tax / GST audits, and representation before factory, pollution, GST, and tax authorities.

5

Monitoring & Review

Compliance calendar, internal audit, renewal tracking, and quarterly management review to keep the plant audit-ready.

Why Choose Us for Manufacturing Advisory

✓
Single team for plant lifecycle
✓
Labour Code transition expertise
✓
Pollution-consent know-how
✓
GST & ITC optimisation
✓
Section 115BAB structuring
✓
PLI & subsidy claims
✓
EXIM & customs advisory
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Cost audit & transfer pricing

FAQs on Manufacturing Compliance in India

What licences are required to set up a factory in India?
A new factory typically needs: entity registration, factory building / layout plan approval, a factory licence under the Factories Act 1948 from the state inspectorate, fire NOC, boiler registration (if applicable), Consent to Establish and Consent to Operate from the State Pollution Control Board, GST and IEC registration, and labour registrations such as EPF, ESI, and Professional Tax. Industry-specific licences (BIS, drug, food, explosives) apply depending on the product.
What are the four new Labour Codes and how do they affect manufacturers?
India is consolidating 29 central labour laws into four codes — the Code on Wages 2019, the Industrial Relations Code 2020, the Code on Social Security 2020, and the Occupational Safety, Health and Working Conditions Code 2020. The biggest impact is the new statutory definition of 'wages', which generally requires basic pay to be at least 50% of total remuneration, increasing PF, gratuity, and leave-encashment costs. Manufacturers should re-structure salary, registers, and HR policy before the codes are fully notified.
What environmental consents does a factory need?
Under the Water Act 1974 and Air Act 1981, a factory needs Consent to Establish (CTE) before construction and Consent to Operate (CTO) before production, issued by the State Pollution Control Board. The category — Red, Orange, Green, or White — determines fees and validity. Additional approvals include hazardous-waste authorisation, EPR registration for plastic / e-waste / batteries, and, for larger projects, environment clearance under the EIA Notification 2006.
Is the 15% corporate tax rate under Section 115BAB available to new manufacturers?
Section 115BAB offers an optional 15% concessional tax rate (plus surcharge and cess) to eligible new domestic manufacturing companies that do not claim specified incentives. However, the benefit is tied to commencement-of-manufacturing timelines set in the section, so availability depends on when the company was set up and began production. We assess eligibility against the current statutory cut-off and model it against the normal regime before recommending an election.
What is the PLI scheme and who qualifies?
The Production Linked Incentive (PLI) schemes provide cash incentives, usually as a percentage of incremental sales of manufactured goods, across sectors such as electronics, pharma, auto components, textiles, and white goods. Eligibility depends on minimum investment and incremental-production thresholds, with applications open only during scheme windows. We map your sector to the right scheme, file the application, track thresholds, and prepare the certified claims required at disbursement.
When is a cost audit mandatory for a manufacturing company?
Under Section 148 of the Companies Act 2013 and the Cost Records and Audit Rules, companies in specified regulated and non-regulated sectors must maintain cost records once turnover crosses prescribed thresholds, and undergo a cost audit at higher thresholds. Applicability depends on the product / industry and overall and product-wise turnover. We assess applicability, maintain records, and file Form CRA-2 (appointment) and CRA-4 (cost-audit report).
How is GST input tax credit handled in manufacturing?
Manufacturers can claim input tax credit (ITC) on GST paid on raw materials, input services, and capital goods under Section 16, provided the supplier has reported the invoice (reflected in GSTR-2B) and the goods / services are used in business. Credits blocked under Section 17(5) cannot be claimed, and an inverted duty structure (inputs taxed higher than output) may allow a refund. We optimise the credit chain, reconcile GSTR-2B, and file inverted-duty and export refunds.

Compliant Plant. Optimised Tax. Faster Approvals.

Partner with our manufacturing experts for factory setup, Labour Code compliance, pollution consents, GST and Section 115BAB structuring, PLI claims, and EXIM advisory for FY 2026–27.

Talk to a Manufacturing Expert