Important note before you read
This guide is general information, not legal or tax advice. Thresholds, fees and rules are revised from time to time and can differ by state and by type of business.
Before you decide anything, check the official websites: gst.gov.in for GST, foscos.fssai.gov.in for FSSAI and udyamregistration.gov.in for Udyam. If you are unsure, a local CA can guide you for your exact situation.
GST: when does a home business need it?
GST registration is generally required once your yearly turnover crosses a threshold limit. At the time of writing, commonly cited limits are around ₹40 lakh for sellers of goods and around ₹20 lakh for service providers in most states, with lower limits in some special category states. Verify the current numbers on gst.gov.in.
There are exceptions. For example, selling through e-commerce operators or making inter-state supplies may need registration even below the threshold in some cases, and the rules for this have been changed over time. Check the latest position before you start shipping to other states or selling on marketplaces.
Some small sellers choose to register voluntarily, for example to supply to businesses that need GST invoices. Registration also brings filing duties, so understand them first.
FSSAI: rules for home food businesses
If you make or sell food, including tiffins, cakes, pickles, sweets or snacks, FSSAI rules apply to you even if you work from home.
Small food businesses below a turnover limit usually need FSSAI basic registration, which is simpler and cheaper than a full licence. Larger businesses need a state or central licence. The exact turnover limits and fees can change, so check the current details on foscos.fssai.gov.in, the official FSSAI online portal.
Once registered, you get a registration number that you should display on your labels and packaging as required. Follow basic hygiene, use clean water, label ingredients and best-before dates, and store food safely.
Udyam registration: free and optional
Udyam registration is the government's registration for micro, small and medium enterprises. It is free on the official portal udyamregistration.gov.in and is generally done online with your Aadhaar and PAN.
It is optional for most home sellers, but it can help you access some government schemes, bank loans and benefits meant for small businesses. Be careful of websites and agents that charge money for Udyam registration and look official. Use only the government portal.
Other things you may need
Depending on your business, other rules may apply. Check the ones that match what you do.
- A local shop or trade licence from your municipality, in some cities.
- Labelling and MRP rules for packaged goods.
- Specific licences for items like cosmetics or medicines.
- Income tax: your business income may be taxable even if you do not need GST. Keep records and file returns as needed.
A simple way to start
Many sellers begin small, keep good records of every sale, and register as they grow or as rules require. Food sellers should look into FSSAI basic registration early because food safety rules apply from the start.
Keep a clear record of orders and payments so you always know your turnover. When you get close to any threshold, speak to a CA well in advance.