Expired, suspended or cancelled drug licence: what it means

Last reviewed: 1 October 2026 · Pharma Mithra

How long a sale licence lasts

Sale licences under the Drugs and Cosmetics Rules, 1945 used to be granted for a fixed period and had to be renewed. Since an amendment to the Rules in 2017, a licence remains valid unless it is suspended or cancelled, provided the licensee pays a licence retention fee before the end of every five-year period from the date of issue. The licensing authority assesses compliance with the licence conditions periodically, at least once every three years or more often on a risk basis.

Many certificates and records, especially older ones, still show a "valid up to" or "valid till" date. Depending on the state and the licence, that date may be an old renewal date or the date the next retention fee is due. Treat a past date as something the supplier must explain with proof, not as an automatic answer either way.

Expired, suspended and cancelled: the difference

Expired (lapsed)

An expired licence is one whose term ran out, or whose retention fee was not paid on time, without the step needed to keep it alive. The Rules give a short grace window: the retention fee can still be paid with a late fee for up to six months after it falls due. If it is not paid within that window, the licence is treated as cancelled. During the gap, the holder should not be trading on that licence.

Suspended

Suspension is a temporary stop imposed by the licensing authority, usually after an inspection finds a breach of the Act, the Rules or the licence conditions. The authority must first give the licensee an opportunity to show cause. A suspension runs for a period the authority decides and can apply to all the drugs covered by a licence or only to some of them. While suspended, the firm may not sell under that licence. When the suspension ends, the licence is in force again.

Cancelled

Cancellation ends the licence permanently. It happens in several ways:

• the licensing authority cancels it for a breach, again after a show-cause opportunity;
• the licensee surrenders it, for example on closing or selling the business;
• it is treated as cancelled because the retention fee was not paid within the grace window;
• the firm's constitution changed and no fresh licence was taken: the old licence stays valid for at most three months after the change unless a fresh licence is issued in the name of the reconstituted firm.

A licensee can appeal a suspension or cancellation to the State Government within the time the Rules allow. A cancelled licence does not come back to life on its own; a firm that wants to trade again needs a fresh licence, often with a new number.

What to do when a supplier shows cancelled

1. Pause new orders and payments. Your own licence requires you to buy drugs only from a duly licensed dealer or manufacturer. Until the supplier shows it holds a licence in force, do not place orders or release advances.
2. Re-check before you act. Make sure you checked the right number in the right state, and that the record is for the premises that supplies you. A wholesaler may hold more than one licence; one may be cancelled while another, at a new address, is active.
3. Ask the supplier in writing. Request an explanation and proof: a fresh licence, an order revoking the cancellation, or a stay granted in appeal. Then verify any new licence number independently rather than relying on a copy.
4. Sort your stock by date. Compare the invoice dates of stock you hold from that supplier with the date the licence stopped being in force, if you can find it. Stock bought while the licence was in force was bought from a licensed dealer; keep the invoices and your dated verification record. Set aside any stock invoiced after the licence ended and ask your licensing authority for guidance before selling it.
5. Check the GSTIN too. A business that has closed often has a cancelled GST registration as well, which affects your input tax credit. See how to verify a supplier's GSTIN.
6. Report if necessary. If the supplier keeps trading without a valid licence, you can inform the drugs control department of the state concerned.

Keeping your own licence in force

• Know your retention date. Count five years from the date of issue and pay the licence retention fee before that date. Keep the receipt and any endorsement with the licence.
• Do not rely on the grace window. Paying late costs a late fee, and missing the six-month window means a fresh application.
• Report staff changes. A change in the registered pharmacist or competent person in charge must be reported to the licensing authority within one month.
• Report a change in constitution. If a partner joins or leaves, or the business is sold or converted, inform the licensing authority and apply for a fresh licence in the new firm's name well within three months.
• Talk to your office before moving. A sale licence is for the premises named in it, so a move is not something to report afterwards.
• Keep the licence displayed in a prominent place in the part of the premises open to the public, as the licence conditions require.

Most states now take applications and fee payments through an online licensing system run by the state drugs control department, and procedures differ a little from state to state. Your licensing office can confirm what applies to your licence. For what each licence form covers, see drug licence forms 20, 21, 20B and 21B.

This guide is general information about Indian drug and tax law for businesses, not legal advice. Rules and procedures can differ by state; your state drug control department or GST office has the final word on any individual case.