MoHFW Notification

Compounding of Offences under Drugs and Cosmetics Act , 1940 for Pharma and Drug Manufacturers

Ministry of Health and Family Welfare has released a gazette notification notifying the new rules that may be called the Drugs and Cosmetics (Compounding of Offences) Rules, 2025. The rules are framed by the Central Government using the powers conferred by the Drugs and Cosmetics Act, 1940.

The notification introduces rules under an existing act, under section 33 of the Drugs and Cosmetics Act, 1940 (23 of 1940).

These rules provide a framework for “compounding of offences” under the Drugs and Cosmetics Act, 1940. This means that instead of going through full prosecution, certain offences might be resolved by paying a specified amount (compounding amount). The rules outline the process for applying for compounding, the authorities involved, and the conditions for granting immunity from prosecution.

Key highlights of the Drugs and Cosmetics (Compounding of Offences) Rules, 2025 notification:

Compounding of Offences: The primary focus is to establish rules for compounding certain offences under the Drugs and Cosmetics Act, 1940, offering an alternative to traditional prosecution.  

Application Process: The rules detail how an applicant (a company or person involved in the pharma industry) can apply for compounding of an offence. This can be done before or after prosecution begins.  

Compounding Authority: The notification defines the “compounding authority” and how they are appointed by the Central or State Government to manage the compounding process.  

Procedure: It outlines the step-by-step procedure the compounding authority must follow, including gathering reports and making decisions on whether to allow compounding.  

Immunity from Prosecution: The rules explain the conditions under which the compounding authority can grant immunity from prosecution to an applicant.  

Withdrawal of Immunity: The notification also specifies the circumstances under which this granted immunity can be withdrawn.  

Form for Application: The inclusion of a specific form for applying for compounding of offences

Why the need for “Compounding of Offences” ?

The Jan Vishwas (Amendment of Provisions) Act, 2023, aims to decriminalize various offenses in 42 Central Acts, enhancing ease of doing business and living by reducing compliance burdens. It accomplishes this by removing imprisonment and/or fines in many provisions, replacing them with penalties or enhancing existing fines. 

Key features and objectives of the Jan Vishwas Act include:

• Decriminalization:The Act decriminalizes 183 provisions across 42 Central Acts, which are administered by 19 Ministries/Departments. 
• Enhanced Ease of Doing Business:The Act aims to simplify compliance for businesses by removing or modifying existing criminal penalties. 
• Trust-Based Governance:By decriminalizing certain offenses, the Act seeks to foster a more trust-based environment for businesses. 
• Pragmatic Penalties:The Act introduces mechanisms for adjudicating officers and appellate authorities, ensuring penalties are commensurate with the severity of the offense. 
• Flexibility in Enforcement:The Act allows for compounding of certain offenses, providing an alternative to full-fledged prosecution. 
• Focus on Specific Acts:The Act addresses provisions in various Acts, including those related to intellectual property, media, and other sectors. 

Drugs and Cosmetics Act, 1940 Amendment: The Drugs and Cosmetics Act, 1940 is one of the acts amended by the Jan Vishwas Act.

Implementation of Jan Vishwas Act’s Intent: The Drugs and Cosmetics (Compounding of Offences) Rules, 2025, can be seen as a mechanism to implement the changes brought about by the Jan Vishwas Act to the Drugs and Cosmetics Act, 1940. It provides the specific procedures and framework for how these offenses will be dealt with, in alignment with the intent of decriminalization and promoting ease of doing business.

Overall, the Jan Vishwas Act aims to create a more business-friendly and less punitive environment by decriminalizing certain offenses and rationalizing legal provisions across various sectors. 

Hence the new Rules on Compounding of Offences under Drugs & Cosmetics Act may have originated from the recent amendments made to Jan Vishwas (Amendment of Provisions) Act 2023.

In essence, the Jan Vishwas Act provides the legislative amendment to allow for decriminalization, and the Drugs and Cosmetics (Compounding of Offences) Rules, 2025, provides the procedural rules for implementing that change through compounding of offenses.


GAZETTE Notification Source :