BIS Compounding of Offences: How to Settle BIS Violations Without Prosecution

The BIS Act 2016 provides a compounding mechanism that allows first-time offenders to settle violations by paying a monetary penalty — avoiding criminal prosecution. This article explains how compounding works and when it is available.

What Is Compounding of Offences?

Compounding means the offender pays an agreed monetary sum to BIS in lieu of facing criminal prosecution in court. The offence is "compounded" — settled — without a court trial or criminal conviction. This is available under Section 35 of the BIS Act 2016.

Which Offences Can Be Compounded?

Not all BIS Act offences are compoundable. The following offences can be compounded:

• Using BIS standard mark without a valid licence (first offence)
• Importing products without mandatory BIS certification (first offence)
• Manufacturing products not conforming to applicable Indian Standards

Repeat offenders — those who have previously compounded or been convicted — are not eligible for compounding. Serious violations involving deliberate fraud or endangering public safety may not be compoundable at BIS's discretion.

The Compounding Process

1. BIS enforcement action identifies the violation
2. The violator applies to BIS for compounding of the offence
3. BIS assesses the compounding amount — typically related to the penalty prescribed under the BIS Act for the offence
4. The violator pays the compounding amount
5. BIS issues a compounding order — the matter is closed
6. No criminal record results from a successfully compounded offence

Compounding Amount

The compounding amount is determined by BIS based on the nature and severity of the violation. It is typically a fraction of the maximum fine prescribed under the BIS Act — which can range from Rs 2 lakh to Rs 50 lakh depending on the offence. The compounding amount plus the cost of compliance (getting certified) is still far less than the cost of criminal prosecution.

Proactive Disclosure

Companies that discover they have been inadvertently non-compliant — for example, importing a product without realizing it required BIS — should consider approaching BIS proactively rather than waiting for enforcement action. Proactive disclosure is typically treated more favorably than discovered violations.

Prevention Is Better

The best strategy is never needing to compound. House of Testing helps manufacturers and importers identify compliance requirements before products enter the market — preventing violations from occurring in the first place.