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Before, we could only enjoy eating out at restaurants with our loved ones. But now, thanks to technology, we can have delicious food delivered right to our doorstep through zomato or swiggy or by calling. Especially after the pandemic, more people prefer eating at home because it’s safer and more convenient. That’s why cloud kitchens, which are kitchens that only prepare food for delivery, have become popular. However, starting a cloud kitchen isn’t easy. There are rules to follow like Food licence (FSSAI certificate), Shop licence,GST registration, Income tax, Fire and safety licence. This article talks about what cloud kitchens are, the GST registration requirement you need to know before starting on.
Understanding GST for Cloud Kitchens
First things first, what exactly is GST and why do you need it for your cloud kitchen? GST stands for Goods and Services Tax, a unified tax system implemented in India that replaced various indirect taxes. Whether you’re selling food online or offline, GST registration is mandatory if your sales turnover exceeds a particular limit.
Who should apply for GST Registration?
You must register for GST if:
- Turnover exceeds the threshold limit: ₹40 lakhs for goods (₹20 lakhs for special category states) or ₹20 lakhs for services (₹10 lakhs for special category states)
- Interstate Supply of Goods: If you supply goods across state borders, GST registration is required, regardless of turnover.
- E-commerce Sellers & Aggregators: Businesses selling through platforms like Amazon, Flipkart, Zomato, Swiggy, etc.
- Casual Taxable Persons: If you supply goods or services occasionally without a fixed place of business.
- Non-Resident Taxable Persons: If you are a foreign business supplying goods/services in India.
- Agents & Input Service Distributors
- Reverse Charge Mechanism (RCM): If you are liable to pay GST under RCM.
- TDS/TCS Deductors: Government departments or e-commerce operators deducting TDS/TCS .
Is GST registration required for cloud kitchen?
GST registration is mandatory if your sales turnover exceeds the limit of Rs. 40 lakhs. But eventhough your sales do not exceed this limit you may still be required to get GST registration if you want to register with Zomato or Swiggy or any other food delivery platform. Alongwith GST you require FSSAI licence, Shop licence and Fire safety licence in case you wish to register with zomato and swiggy.
What is GSTIN?
GSTIN, or Goods and Services Tax Identification Number, is a unique 15-digit alphanumeric code assigned to every registered taxpayer in India. This number serves as a primary identifier for businesses registered under GST, facilitating seamless tax administration. GSTIN contains details such as the state code, PAN number of the taxpayer, entity code, and a check digit, enabling authorities to track transactions, verify authenticity, and ensure smooth interstate trade within the GST framework.
Documents Required for GST Registration for Cloud kitchen
- PAN Card
- Aadhar Card
- Proof of business registration (e.g. FSSAI licence, Shop licence,etc) (Optional)
- Passport size Photo
- Electricity Bill or Property tax bill (Latest) as business address proof
- Ownership Document like Index 2/Sale deed (if owned) or Rent Agreement (if rented) or NOC from owner (if consent arrangement or shared property) as business address proof.
GST registration documents for Partnership firm
Online GST Registration Process to Register Your Cloud Kitchen
Visit the GST Portal – Navigate to Services > Registration > New Registration.
Generate TRN via OTP Verification Enter business details (Taxpayer type, State, Distric, Legal name as per PAN, PAN, mobile and email). Complete OTP verification to receive a Temporary Reference Number (TRN).
Log in with TRN – Use the TRN to continue the application, complete OTP verification, and proceed.
Enter Business Details – Provide trade name, business type, district, Reason to obtain, Existing registratioon if any, business start date, etc.
Submit Promoter Details – Enter personal details of proprietors/partners, including PAN, Aadhaar, Residential address, Passport size photo and DIN (if applicable).
Principal Place of Business – Provide office address, contact details, and ownership proof (property tax receipt, rent agreement, NOC,etc.). Enter the GST jurisdition like district, sector/circle/ward/charge/unit, commissionerate code, division code and range code correctly otherwise application will be rejected.
Goods & Services Details – Specify Top 5 HSN/SAC codes for the products/services supplied.
Bank Details – Enter bank details like account no., IFSC and upload cancelled cheque or bank statement. This is optional but don’t forget to update it after registration.
Aadhaar authentication – Next, choose whether or not you are willing to do Aadhaar authentication. If you select NO then physical verification of business premises by GST officers will be mandatory.
Application Verification – Check all details, sign digitally (DSC/EVC), and submit.
ARN Generation – Upon submission, receive an Application Reference Number (ARN) via email/SMS to track the application status.
GST rates for Cloud Kitchen and Restaurant services
Following the introduction of GST on food services, restaurants are now subject to a 5 % GST rate without Input tax credit (ITC) which is nothing but GST credit that you can claim when you purchase from a GST registered business. They have another option to charge 18% GST with Input Tax Credit (ITC).
The GST rates applicable for cloud kitchen is 5% without ITC or 18% with ITC. But the beneficial option is 5% without ITC as the complainces get easier and is beneficial. Below is the comprehensive list of applicable GST rates on restaurant services, covering beverages, food, and accommodation.
Services | GST Rates |
| Standalone restaurants with takeaway facility including both AC and non-AC restaurants (includes Cloud kitchen) | 5% without ITC |
| Food delivery service or standalone catering service | |
| Indian Railways or IRCTC catering service or licensees of IRCTC serving food at platforms or in trains | |
| Composite outdoor catering within hotel with room tariff less than Rs.7,500 | |
| Restaurants within hotels with room tariff less than Rs.7,500 | |
| Cafeteria, mess, or canteen operating on a contractual basis not for any event or occasion in school, college, office, or industrial unit, serving food or drinks | |
| Composite catering service in hotels with room tariff Rs.7,500 or more | 18% with ITC |
| Restaurants in hotels with room tariff Rs.7,500 or more | |
| Premises organising function or renting for events and providing food services | 18% |
| Food services provided in occasions, conferences, events, exhibitions, and indoor or outdoor function |
GST Rate on Various Food Items
The following are the GST rates on popular food items and the list is not exhaustive.
| Particulars | GST Rate |
| fresh and/or chilled vegetables | Nil |
| frozen vegetables | |
| dried leguminous vegetables other than pre-packaged and labelled | |
| fresh/dried coconuts, grapes, apples, bananas, and pears, among others | |
| fruits like grapes, apples, bananas, pears, mangoes, citrus fruits, and berries, among others | |
| fresh milk, pasteurised milk (excluding UHT milk), and milk and cream (not concentrated nor contains added sugar or sweeteners) | |
| curd, lassi, and buttermilk, other than pre-packaged and pre-labelled | |
| fresh or chilled meat and fish | |
| birds’ eggs in shells | |
| rice other than pre-packaged and labelled | |
| wheat or meslin (i.e. maize flour) other than pre-packaged or labelled | |
| rye other than pre-packaged and labelled | |
| dried vegetables that are packaged and labelled | 5% |
| dried leguminous vegetables that are pre-packaged and labelled | |
| milk and cream that is concentrated or contains added sugar or sweeteners | |
| curd, lassi, and buttermilk that is pre-packaged and pre-labelled | |
| yoghurt and cream, whether containing sugar/flavouring or not | |
| meat that is packaged and labelled | |
| birds’ eggs which are not in a shell | |
| rice, pre-packaged and labelled | |
| wheat or meslin, pre-packaged and labelled | |
| rye, pre-packaged and labelled | |
| cereal flours other than of wheat or meslin, rye, etc., pre-packaged and labelled. | |
| vegetables, fruits, nuts, and edible plant parts that are preserved using sugar | 12% |
| fruits, nuts, and edible plant parts that are preserved and/or prepared using vinegar and/or acetic acid. | |
| chocolate and food preparations containing cocoa | 18% |
How to Check GST Registration Status Online?
If you have applied for GST registration and want to track its status:
- Go to GST Portal and click on ‘Services’ → ‘Registration’ → ‘Track Application Status’.
- Enter ARN (Application Reference Number) received after submission.
- Enter Captcha & Submit.
- View Status: The status will show as:
- Pending for Processing
- Approved
- Rejected
- Clarification Required (if additional documents are needed)
How to Download the GST Registration Certificate Online?
Step 1: Visit the GST Portal
Go to the official GST website: https://www.gst.gov.in/
Step 2: Log in to Your GST Account
- Click on ‘Login’ in the top right corner.
- Enter your username, password, and the captcha code.
Step 3: Navigate to Certificate Download Section
- Click on ‘Services’ → ‘User Services’
- Select ‘View/Download Certificates’
Step 4: Download the Certificate
- You will see a list of certificates. Click on the ‘Download’ link under the GST Registration Certificate (Form GST REG-06) section.
- The certificate will be downloaded as a PDF file.
Step 5: Print and Use the Certificate
- The GST certificate contains details such as GSTIN, business details, registration date, and QR code.
- Businesses must display the GST certificate at their principal place of business.
Benefits of GST Registration for Cloud Kitchen
Before we get into the process, let’s quickly skim through the benefits of GST registration for your cloud kitchen:
- Legitimacy: GST registration lends credibility to your cloud kitchen business.
- Input Tax Credit (Purchase GST) : You can claim input tax credit on the GST paid on your inputs like food items, kitchen utensils, microwave oven, etc which helps reduce overall costs. But cloud kitchens won’t be able to claim GST on purchases if they choose to charge GST at 5% on sales without the benefit of setting off ITC on purchase.
- Compliance: Being GST-compliant ensures smooth operations without the fear of penalties or legal repercussions.
- Expansion Opportunities: With GST registration, you can expand your market reach by selling across states without any hassle.
Penalty for Not Registering or Late Registering Under GST
According to the GST Act, a business is required to register with GST within 30 days from the date on which business becomes liable to register. If a business fails to register for GST within the time limit or registers late, business is liable to pay a penalty as follows-
1. Penalty for Not Registering Under GST (When Liable)
If a business is liable to register under GST but fails to do so, they may face the following consequences:
- Tax Liability: The business must pay the GST due from the date it became liable for registration, along with 18% p.a. interest.
- Penalty:
- For deliberate evasion: 100% of the tax due (minimum ₹10,000).
- For other cases: 10% of the tax due (minimum ₹10,000).
2. Penalty for Late GST Registration
If a business registers after the due date but before GST authorities take action, the penalties may be more lenient. However, the following penalties still apply:
- Interest on Tax Due: The taxpayer must pay interest (currently 18% per annum) on the GST amount due from the date they should have been registered.
- Late Fee (in some cases): While late registration itself does not attract a specific late fee, failure to file returns post-registration can result in penalties.
What after getting GST registration?
- Display GST certificate: You must download GST registration certificate and take a print out and display it in your office. Signboard should contain GSTIN.
- Upload Bank details: A new Current A/c account must be opened and cancelled cheque or bank statement must be uploaded in GST portal within 30 days of registration to avoid cancellation of GST registration.
File Returns: After GST registration, you are required to file regular GST returns like GSTR 1 and GSTR 3B, detailing your business sales and purchase transactions and GST liabilities. Ensure timely filing to avoid late fees and interest.
Tax Invoicing: Issue GST-compliant tax invoices including all requisite details such as GSTIN, invoice number, date, and itemized charges.
Record Keeping: Maintain proper records of all your business transactions, including sales, purchases, invoices, and tax payments.
Get GST Registration Online quickly through CA A R Dhorajiya & Co.
Whether you are a startup, MSME, or an established business, we provide end-to-end assistance, from document preparation to application submission. Avoid penalties, stay GST-compliant, and focus on growing your business while we handle the GST formalities. Contact us today at +91 9769647582 for a seamless GST registration experience.
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