Step by step
- Define your businessWrite down what you sell, where you sell, whether you sell across states or on marketplaces, and your expected yearly turnover.
- Get basic documents readyKeep your PAN, Aadhaar, address proof, bank account details and a photo ready, as most registrations ask for them.
- Check FSSAI if you sell foodVisit foscos.fssai.gov.in to see whether basic registration or a licence applies and apply before selling.
- Check GST requirementsRead the current threshold and special cases on gst.gov.in, and register if your situation requires it.
- Check state and local rulesLook up your state's shop and establishment rules and any municipal trade licence for your city.
- Consider Udyam registrationIf useful for schemes or loans, register free on udyamregistration.gov.in.
- Keep records and reviewTrack sales and expenses and review your registrations with a CA as your business grows.
Before you start: an important note
Rules, thresholds and fees for business registration in India change from time to time and can differ by state, by city and by type of business. This guide gives a general picture only.
Use official portals for the latest information, such as gst.gov.in, foscos.fssai.gov.in and udyamregistration.gov.in, and your state's labour department website for shop and establishment rules. A chartered accountant can tell you exactly what applies to your business.
Udyam registration: free and optional
Udyam is the government's registration for micro, small and medium enterprises (MSMEs). It is done online on udyamregistration.gov.in using Aadhaar and PAN, and it is free on the official portal.
For most home sellers it is optional. It can help you access some government schemes, bank loans and benefits meant for small businesses. Be careful of private websites that look official and charge a fee; check the web address before entering any details.
Choose a simple business structure to begin with. Most home sellers start as a sole proprietor, which means the business is legally you. Partnerships, LLPs and private limited companies have their own registration steps and costs, and are worth discussing with a CA only when you grow.
GST: when it is generally required
GST registration is generally required when your yearly turnover crosses the threshold that applies to you. At the time of writing, commonly cited limits are around ₹40 lakh for many suppliers of goods and ₹20 lakh for services, with lower limits in some special category states. These figures can change.
Some situations may require registration even below the threshold, such as certain inter-state supplies of goods or selling through some e-commerce operators. Registration also brings regular return filing duties. Read the current rules on gst.gov.in and ask a CA before you register or decide not to.
FSSAI: for food businesses
If you make or sell food, including home tiffins, cakes, pickles, sweets or snacks, FSSAI rules generally apply even if you work from home. Small businesses below a turnover limit usually need basic registration, while larger ones need a state or central licence.
You can check categories, fees and documents and apply online on foscos.fssai.gov.in. Once registered, display your number on labels as required and follow basic hygiene and labelling rules.
If you register for GST, you will need to issue proper invoices, collect tax where it applies and file returns on time, even in months with low sales. Late filing can attract penalties, which is another reason to plan with a CA.
Shop and establishment and local licences
Many states have a Shops and Establishments Act that requires businesses with a shop, office or staff to register with the state labour department. Whether a small home business needs it varies by state and situation, and some states have simplified or exempted very small units.
Some cities also require a municipal trade licence for certain activities. Check your state labour department and municipal corporation websites, or ask a local CA, because these rules differ widely.
- Product-specific rules may also apply, such as legal metrology labelling for packaged goods or licences for cosmetics.
- Income tax applies to business income based on your total income, whether or not you need GST. See incometax.gov.in.
- A separate bank account for business, while not a registration, makes records much easier.
A sensible order to follow
Many sellers start small, keep careful records and add registrations as their business grows or as rules require. Food sellers should look at FSSAI before their first sale. Everyone should keep an eye on turnover and GST rules.
While you sort out paperwork, you can still set up the selling side. A free ShopShare shop gives you a link to share and orders on WhatsApp, and you can mention your FSSAI or GST number in your shop or product descriptions once you have them.
Be careful of agents who promise instant licences for high fees or ask for documents over unknown links. Use official portals, keep copies of every application and certificate, and note renewal dates in your phone.