How To Register A Food Business In India

Posted: July 27, 2015

Have you ever wondered how to register a food business in India? Do you have a food business you want to register? If yes, here are all the nitty gritties to get you started.

Given the popularity of our article The Rise of The Home Baker and the feedback received, we thought it would be good to do a follow up dealing with the actual nitty gritty of registering a food business that you start from home. Read on to find out more.

Starting your own food business from home is a trend that is fast gaining popularity. From pickles, to breads to cakes to jams, you name it and someone out there is making it for you. However, what does one have to do to actually register one’s business? I spoke to a few entrepreneurs and chartered accountants on this subject.

The first and most important thing that one must do before jumping onto this band wagon is to decide what type of business you want to run. You will have to decide the structure of your business depending on the size of it. You have three options:

A proprietorship
A partnership
A Private Limited Company/Corporation

Kishi Arora of Foodaholics chose to set up a proprietorship from day one itself. Kishi is a consultant as well and found that this method of business works well for her. She registered her business, her logo, and made sure all the paperwork was done before she started out working from home. The process she said took about a month and her lawyer and CA handled it for her. “I feel this should be done. The professionalism needs to be there,” is what she says. Kishi has now incorporated her mother’s food business into Foodaholics as well. “It was so easy to do this as I had already set up the proprietorship,” she added.

Brian Fernandes of Ferns Fine Foods Pvt Ltd took over this family business in 1995 when his father died. This business was originally started in 1937 by his grandmother who used to sell sweets, jams, jellies and then later pickles to the British soldiers who were stationed in Pune during that time. As time went by, Brian’s father and uncle set up a partnership and took over the business. When Brian’s father passed away, he stepped in. He decided to make it a private limited firm and build a new factory as well. This once again entailed getting the necessary permits/licenses and he was changing it from a partnership firm to a private limited company.

According to Mr. Ram Bhargava*, a Chartered Accountant with a reputed firm in Mumbai, these are the documents you will require if you decide to go down this road:

PAN – Permanent Account Number.
A food license – this is essential if you are running a food business from home. This license can be obtained from the Food Safety and Standards Authority of India (FSSAI). You can apply online for this license if you belong to the following states. The documents required for a new license can be found. Please note that if you are making wines you will need an Excise permit from the State Excise Department as well.
NOC – A No Objection Certificate should also be obtained from the society/residential premises you are operating out of. Most food businesses start off at home itself and for this you would need to take permission from your society – if you are planning to register your business.
Value Added Tax (VAT): You would need to register with the VAT Department in order to get your Value Added Tax number. Do remember that a VAT number is required depending on your business’s turnover. The turnover threshold of a business differs from state to state.
Central Excise Registration –This document from the Central Board of Excise and Customs will depend once again on the size of your business and its turnover.

Apart from the above mentioned documents, the following might also be needed:

Employee Provident Fund Registration & ESI (Employee State Insurance) Registration
Service Tax Registration
TAN (Tax Collection & Deduction Account Number)
VAT/ CST Registration
Shops & Establishment License
Importer Exporter Code
Professional Tax

Once again, these are determined by the business size and turnover. Bear in mind that the type of business you choose will determine the license requirements. For instance, if you decide to set up a proprietorship, you do not have to apply for a different PAN number. Your personal PAN number will be your proprietorship’s PAN number. This is not the case for a partnership or a private limited company.

Subodh Sankar of AttaGalatta in Bangalore took a slightly different route when it came to registering the ‘bread’ part of his bookstore. Subodh and his wife started the bookstore and conceptualized it as a “venue for literary and artistic interpretations”. The bookstore started flourishing and they thought it would be good to have a “bakery on the premises.” He had already established and registered his business but still needed to get the necessary permits and licenses to see food in the bookstore.

His recommendation to any start up entrepreneur is to work with a professional agency “who will do all the running around for you. It is virtually impossible to stay on top of the statutory requirements, keep track of changes etc. Once you register your business you will have monthly, quarterly and annual obligations to meet.” He states that it is not easy to run a business and take care of this and feels that handing this part over to a professional helps a great deal.

Bear in mind that each state in India has different rules that apply with regard to filing returns, VAT etc. You can go online and check the requirements for the same. A general overview can be found here.

So there you have it. An overview of the documents required if you wish to register your food business and not just run it by word of mouth.

Important links:

Food Safety and Standards Authority of India

Central Board of Excise and Customs

*name changed on request.

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