What is a PESO licence for a cracker shop?

It is a licence under the Explosives Rules, 2008 to make, possess or sell fireworks. The common forms are LE-1 for manufacture up to 15 kg, LE-3 to possess and sell up to 50 kg, and LE-5 for seasonal sale up to 100 kg of fireworks or 500 kg of sparklers.

How long is a fireworks licence valid?

Licences under the Explosives Rules, 2008 are valid for 3 years and are renewable under Rule 165. Apply for renewal before expiry; selling on a lapsed licence is treated as selling without one.

What is the difference between LE-3 and LE-5?

LE-3 is a year-round licence to possess and sell up to 50 kg of explosives, suited to a permanent shop. LE-5 is seasonal: it allows more stock, 100 kg of fireworks or 500 kg of sparklers, but only for a maximum of 15 days in a year.

Does my licence number have to appear on invoices?

Several states expect the explosives licence number printed on sale invoices, and inspectors and transporters routinely ask for it. Set it once in your billing software so it prints on every bill along with your GSTIN.

PESO licence for cracker shops: LE-1, LE-3 and LE-5 explained

Licences & Compliance · 15 August 2026

Every cracker shop in India runs on a licence with an LE number on it, and most owners never look at the form again after the inspector hands it over. Then a renewal comes up, or a stock check, or a new godown, and suddenly it matters whether the paper says LE-3 or LE-5 and what the kg limit on it actually means.

The forms come from the Explosives Rules, 2008. The issuing side is split: PESO, the Petroleum and Explosives Safety Organisation, handles the higher-quantity licences, while the lower seasonal ones go through the district authority. Three forms cover almost every fireworks business: LE-1 for small manufacture, LE-3 for a regular shop, LE-5 for a seasonal stall. Here is what each one does.

LE-1: small-scale manufacture

LE-1 is a licence to manufacture fireworks or gunpowder, up to 15 kg at any one time. It is meant for the small workshop end of the trade, the kind of unit you see around Sivakasi making one line of items. If you only buy and sell, you do not need it. A retailer who starts filling his own gift boxes from loose items is still trading, not manufacturing, so LE-1 stays out of the picture for almost every shop reading this.

LE-3: the year-round shop licence

LE-3 lets you possess and sell explosives up to 50 kg. This is the form for a permanent cracker shop or a small wholesale counter that holds stock through the year rather than only for the fifteen days around Diwali. The 50 kg ceiling is on what you hold at any time, so a shop that turns stock over quickly can bill far more than 50 kg across a season while staying inside the limit on any given day.

LE-5: the seasonal stall licence

LE-5 is the one most Diwali retailers actually hold. It permits the sale of fireworks by a non-manufacturer, with possession up to 100 kg of Class 7 fireworks or 500 kg of sparklers (chorsa), and the shop can operate for not more than 15 days in a year. That 15-day cap is why the trade calls it the seasonal licence: it exists for the Diwali stall, the temporary counter in the market ground, the shed put up for one season.

Note the two separate weight limits. Sparklers are treated more gently, 500 kg against 100 kg for the rest, because they are the lowest-hazard item in the shop. If your stall is heavy on flower pots, rockets and bombs, the 100 kg figure is the one your stock has to fit inside.

There is also an LE-4, a licence to transport explosives, which matters to the lorry operator carrying your goods rather than to you. Your side of that transaction is the LR and the invoice; the transporter’s side is his own licence. It is still worth knowing the form exists, because a wholesaler who cannot tell you how his goods travel is a wholesaler to think twice about.

Which licence fits which shop

Form	What it permits	Limit	Fits
LE-1	Manufacture fireworks or gunpowder	15 kg at any one time	Small manufacturing unit
LE-3	Possess and sell explosives, year round	50 kg	Permanent shop, small wholesaler
LE-5	Seasonal sale of fireworks by a non-manufacturer	100 kg fireworks or 500 kg sparklers, max 15 days a year	Diwali stall, temporary counter

The choice usually makes itself. Open only for the season, stock under 100 kg: LE-5, plus the district permissions that come with a temporary stall. Open through the year, or holding wholesale stock: LE-3. Making anything at all: LE-1, and that is a different business with different inspections.

The kg limits also decide your buying pattern. An LE-5 holder who books ten cases from Sivakasi cannot take delivery of all of it into the stall at once if it crosses the possession limit; the trade handles this by staggering delivery or holding goods with the transporter until earlier stock sells. Plan the season’s purchases against the licence, not the other way round.

Validity and renewal under Rule 165

These licences are valid for 3 years and renewable under Rule 165 of the Explosives Rules. Renewal is routine if your record is clean, but it is your job to apply before expiry, not the department’s job to remind you. Put the expiry date somewhere you will actually see it, because selling on an expired licence is treated the same as selling with none.

One more thing to watch: amendments to the Explosives Rules reported in 2026 add shop-safety conditions for fireworks premises, such as minimum distances from schools and hospitals and fire-detection requirements. The details are still settling state by state, so confirm the current requirements with your licensing authority before you renew or shift premises.

Put the licence number on your bills

Inspectors, transporters and wholesale parties all ask for your licence number, and several states expect it printed on the invoice itself. Typing it on every bill by hand is how it ends up wrong on half of them. A billing app built for the trade, like Crackers Billing Software, stores the LE number once in business settings and prints it on every invoice automatically, the same way it prints your GSTIN.

The kg limit on your licence is a possession limit, checked on the day of inspection. Keep a running stock figure in kg alongside cases and boxes, so you always know where you stand against it.

Frequently asked questions

What is a PESO licence for a cracker shop?: It is a licence under the Explosives Rules, 2008 to make, possess or sell fireworks. The common forms are LE-1 for manufacture up to 15 kg, LE-3 to possess and sell up to 50 kg, and LE-5 for seasonal sale up to 100 kg of fireworks or 500 kg of sparklers.
Which licence does a Diwali stall need?: Most seasonal stalls operate under Form LE-5, which allows sale for up to 15 days a year with possession up to 100 kg of Class 7 fireworks or 500 kg of sparklers. The stall also needs the district magistrate’s permission and police and fire NOCs on top of it.
How long is a fireworks licence valid?: Licences under the Explosives Rules, 2008 are valid for 3 years and are renewable under Rule 165. Apply for renewal before expiry; selling on a lapsed licence is treated as selling without one.
What is the difference between LE-3 and LE-5?: LE-3 is a year-round licence to possess and sell up to 50 kg of explosives, suited to a permanent shop. LE-5 is seasonal: it allows more stock, 100 kg of fireworks or 500 kg of sparklers, but only for a maximum of 15 days in a year.
Does my licence number have to appear on invoices?: Several states expect the explosives licence number printed on sale invoices, and inspectors and transporters routinely ask for it. Set it once in your billing software so it prints on every bill along with your GSTIN.

Sources

This guide is general information for the crackers trade, not legal, tax or safety advice. Rules change by state and by year; confirm the current position with your licensing authority or accountant.