Is GST required for a FSSAI in India?

Operating a food business in India involves navigating various regulations to ensure safety and compliance. Two crucial aspects are obtaining a Food Safety and Standards Authority of India (FSSAI) license or registration and understanding the applicability of the Goods and Services Tax (GST). While seemingly separate, these two are vital for the smooth and legal functioning of any food business. This article aims to clarify whether GST registration is required for businesses that have an FSSAI license or registration in India.

What is FSSAI?

The Food Safety and Standards Authority of India (FSSAI) is the primary regulatory body responsible for ensuring the safety and standards of food across the country. Under the Food Safety and Standards Act, 2006, all Food Business Operators (FBOs) involved in the manufacturing, processing, storage, distribution, and sale of food products must obtain an FSSAI license or registration.   

The type of FSSAI license or registration required depends on factors such as the annual turnover, production capacity, and the nature of the business. There are three main categories:

• Basic Registration: For petty food businesses with an annual turnover of up to ₹12 lakh. This includes small retailers, hawkers, and temporary stallholders.

• State License: For businesses with an annual turnover between ₹12 lakh and ₹20 crore. This category includes medium-sized manufacturers, storage units, transporters, and retailers.

• Central License: For large food businesses with an annual turnover exceeding ₹20 crore. This also applies to importers, exporters, and businesses operating in multiple states.

Having an FSSAI license or registration is mandatory for all food businesses in India to ensure adherence to food safety and quality standards. Failure to comply can lead to penalties and legal action.

Understanding GST

The Goods and Services Tax (GST) is an indirect tax levied on the supply of goods and services. It is a comprehensive, multi-stage, destination-based tax that has subsumed many previous indirect taxes. GST registration is mandatory for businesses that meet certain criteria, primarily based on their annual turnover.

As of today, April 10, 2025, the threshold for mandatory GST registration for most businesses is an annual turnover of ₹40 lakh for the supply of goods and ₹20 lakh for the supply of services. However, for businesses operating in certain special category states, these thresholds are lower.

The Interplay between FSSAI and GST

A common question among food business operators is whether having an FSSAI license or registration exempts them from GST registration, or vice versa. It's crucial to understand that FSSAI and GST are two distinct regulatory requirements that a food business must comply with based on their applicability.

The possession of an FSSAI license or registration does not exempt a food business from obtaining GST registration if its annual turnover exceeds the prescribed GST threshold. Similarly, obtaining GST registration does not negate the requirement for an FSSAI license or registration if the business is involved in food-related activities.

According to information available on Online Legal India, all food businesses with an annual turnover exceeding ₹40 lakh are mandated to have GST registration, irrespective of their FSSAI status. Even if a food business has obtained the necessary FSSAI license or registration, it must still comply with GST regulations if its turnover crosses the threshold.

Conversely, a food business might have a turnover below the GST threshold and thus not be required to register for GST. However, it would still need to obtain the relevant FSSAI license or registration based on the nature and scale of its operations.

Key Takeaways

• Separate Requirements: FSSAI and GST are independent compliance requirements for food businesses in India.

• Turnover is Key for GST: The primary factor determining the need for GST registration is the annual turnover of the food business exceeding ₹40 lakh (or lower for special category states).

• FSSAI is Activity-Based: The requirement for FSSAI license or registration depends on the nature and scale of the food business operations.   

• No Exemption Based on Other Registration: Holding an FSSAI license or registration does not exempt a business from GST, and vice versa.

• Compliance is Essential: Food businesses must comply with both FSSAI and GST regulations based on their individual applicability to avoid penalties and ensure legal operation.

In conclusion, requirment of GST for FSSAI in India if its annual turnover exceeds the specified threshold, regardless of whether the business holds an FSSAI license or registration. Both compliances serve different purposes – FSSAI ensures food safety and standards, while GST is a tax on the supply of goods and services. Therefore, food business operators must be diligent in understanding and meeting both sets of requirements to operate legally and efficiently. Consulting with experts, such as those at Online Legal India, can provide further clarity and assistance in navigating these regulatory landscapes.