Does FSSAI Require GST? A Guide to FSSAI Registration and GST Requirements

Starting a food business in India requires navigating various legal requirements to ensure smooth operations and long-term success. Two key registrations often sought by food business operators (FBOs) are the FSSAI (Food Safety and Standards Authority of India) registration and GST (Goods and Services Tax) registration. Many wonder if obtaining both is necessary and whether having an FSSAI registration obligates you to have a GST number.

In this blog, we'll delve into the significance of FSSAI registration, explore whether GST is mandatory for FSSAI, and provide a comprehensive overview of when and why both registrations might be essential for your food business.

What is FSSAI Registration?

FSSAI registration is mandatory for any entity involved in the manufacture, processing, storage, distribution, or sale of food products in India. The Food Safety and Standards Authority of India (FSSAI) is a government body that regulates and oversees food safety to ensure that food products are safe for consumption. It’s essential to understand that FSSAI registration is crucial for all food-related businesses, whether they are large-scale manufacturers or small street vendors.

Why is FSSAI Registration Important?

• Legal Compliance: FSSAI registration is a legal requirement for operating a food business in India. Without it, your business is considered illegal, and penalties can be imposed.
• Consumer Trust: Having an FSSAI registration number on your product builds consumer trust and confidence, as it assures them that the food is safe for consumption.
• Quality Standards: FSSAI helps businesses maintain the necessary food quality standards, which protects customers from health risks.
• Export Opportunities: FSSAI certification is also beneficial for businesses looking to expand internationally, as many countries require proof of food safety standards for imported products.

Does FSSAI Registration Require GST?        

The short answer is no—FSSAI registration does not require a GST registration. Both FSSAI and GST are separate legal frameworks. While FSSAI focuses on food safety and hygiene, GST deals with the taxation of goods and services, including food.

That being said, depending on the type and scale of your food business, you may be required to register for both FSSAI and GST. Let’s break this down:

When Do You Need FSSAI Registration?

• Small Businesses: For small-scale operators with a turnover of less than ₹12 lakh per annum, FSSAI Basic Registration is sufficient. This includes home-based food businesses, small street vendors, and local food shops.
• Medium to Large Businesses: Businesses with a turnover of ₹12 lakh to ₹20 crore require FSSAI State Registration. This applies to restaurants, manufacturers, and traders.
• Large Scale Businesses: For businesses with a turnover exceeding ₹20 crore, FSSAI Central License is required. These include large manufacturers, importers, and food chains.

When Do You Need GST Registration?

• Turnover Threshold: GST registration is required for businesses whose annual turnover exceeds ₹20 lakh (₹10 lakh for special category states). This includes food businesses, as they are supplying taxable goods (food products).
• Interstate Transactions: If your business involves supplying food products across state borders, GST registration is mandatory regardless of your turnover.
• Online Sales: Any food business selling products through e-commerce platforms is required to register under GST, regardless of turnover.

How FSSAI and GST Complement Each Other

While FSSAI registration and GST registration serve different purposes, they often go hand-in-hand for businesses in the food industry. Here’s why:

1. Building Trust with Consumers: Both FSSAI and GST registration numbers instill confidence in consumers. An FSSAI license assures them of food safety, while a GST number shows that your business is compliant with tax regulations.
2. Expanding Business: If your food business is growing and you’re expanding to multiple states or selling online, having both FSSAI and GST registration makes it easier to establish credibility and scale your operations.
3. Compliance with E-commerce Requirements: Selling food products on online platforms such as Zomato, Swiggy, Amazon, or Flipkart requires both FSSAI and GST registrations. This is a legal requirement to protect consumers and ensure tax compliance.

Benefits of Getting Both FSSAI and GST Registration                       

If you operate a food business, having both registrations brings significant advantages:

• Government Recognition: FSSAI and GST registrations provide your business with legal recognition, which is crucial when dealing with suppliers, distributors, and even investors.
• Expansion and Growth: Whether it’s increasing sales through online platforms or exporting food products, having both registrations simplifies processes and ensures you meet all regulatory requirements.
• Transparency and Accountability: GST registration helps in tracking tax payments and avoiding any discrepancies. Combined with FSSAI, it ensures that you operate transparently, offering high-quality food while adhering to tax regulations.
• Financial Incentives: Some businesses may benefit from claiming input tax credit under GST, which can reduce the overall tax liability, particularly for manufacturers and suppliers in the food industry.

How to Apply for FSSAI and GST Registration

• FSSAI Registration Process:

1. Visit the official FSSAI website.
2. Create an account and fill out the application form (Form A for Basic Registration, Form B for State/Central License).
3. Submit the required documents such as ID proof, business address proof, and food safety management plan.
4. Pay the applicable fees and submit your application.
5. Upon approval, you will receive the FSSAI registration/license number.

• GST Registration Process:

1. Visit the official GST portal.
2. Create an account and fill out the GST REG-01 form.
3. Submit necessary documents such as PAN card, Aadhaar card, proof of business registration, and bank account details.
4. Complete the verification process.
5. After verification, you will receive the GSTIN (Goods and Services Tax Identification Number).

Conclusion

While FSSAI registration does not require GST registration, many food businesses need both to operate legally and grow effectively. If your turnover exceeds the GST threshold or you engage in interstate or online sales, it’s essential to have both FSSAI and GST registrations in place. Not only do these registrations ensure compliance with food safety and tax regulations, but they also enhance consumer trust and provide opportunities for business expansion.