GST Requirement for FSSAI Services: Is It Mandatory?

In India, the FSSAI and GST registration function as two foundational pillars for food business operators (FBOs). While FSSAI ensures food safety through strict regulations, GST registration helps you handle tax compliance. Though they serve distinct purposes, both are necessary as your business scales. In short, FSSAI registration and GST are fundamentally independent legal requirements governed by different laws, and neither is an absolute prerequisite for the other. In this article, we will address your confusion regarding the GST requirement for FSSAI services and will also talk about the applicable GST rate and the steps involved in the registration & certification processes.

Is GST Registration Mandatory for an FSSAI License?

If you want to obtain a Basic or State FSSAI license, GST registration is not mandatory.  However, there is more to it.

Basic/State/Central Licenses

→A basic FSSAI license is required if your annual turnover is up to Rs 12 Lakhs, and to apply for the license, you only need:

• PAN card
• Address proof
• Passport photos

→You need a State FSSAI license if your annual turnover ranges between Rs 12 Lakhs and Rs 20 Crores. Now, here’s the catch! Though you can use your Shop/Establishment Act registration, municipal trade licenses, or any other government documents for business proof, having a GSTIN may serve as one of the accepted business identity documents wherever applicable.

→You are required to have a Central FSSAI license if your turnover exceeds Rs 20 Crores.

When Does GST Become Compulsory?

Below, we will mention all the criteria that will require you to apply for GST registration if your business meets them.

• If your aggregate annual turnover exceeds the applicable threshold (depending on the nature of supplies and the State or special category states in which it operates).
• If you sell your food products through e-commerce aggregators, you must have a GSTIN from day 1, even if your turnover is below Rs 20 Lakhs or Rs 40 Lakhs. 
• You supply food products/related services across state borders. 

4 Benefits of Holding Both FSSAI & GST Registrations

Before we discuss the applicable GST rate on FSSAI official services or the steps to apply for FSSAI & GST registration, let’s quickly sum up the benefits of holding both registrations. 

First of all, holding both certificates will definitely provide any FBO like you with a massive operational advantage in India. While FSSAI certification/license will help you stay compliant with regulations related to food safety, GST registration ensures you meet legal taxation requirements. Also, it will allow you to claim tax benefits on business expenses, sell through e-commerce operators, and expand your market reach seamlessly.

Below are The Core Benefits of Holding Both FSSAI & GST Registrations

1. Holding a GST registration along with FSSAI allows you to claim ITC on business expenses, which means you can deduct the tax paid on raw items, packaging, logistics, and kitchen equipment from your final tax liability.
2. Holding both registrations will enable you to partner with major food delivery aggregators such as Zomato, Swiggy, etc. and other e-commerce platforms like BigBasket, Zepto, Blinkit, as most of them mandate these certifications for vendor onboarding.
3. Having both registrations allows you to supply your food products to corporate clients, large retail chains, and even export to another state seamlessly.
4. Holding both registrations will significantly benefit you if you want to apply for a business loan because financial institutions and banks require both an FSSAI license and GST returns as core proofs of ROI generated, scalability, and regulatory compliance. 

How Much GST is Applicable on FSSAI Official Services?

All official services rendered by the FSSAI attract a standard 18% GST. While the mandate for this tax applies across national platforms, individual state/basic licenses carry a notable exception where the tax is processed on a reverse charge basis. 

Understanding the 18% GST Applicable

The Government now charges an 18% tax on all FSSAI food licensing and registration fees. Previously, you did not have to pay this tax. However, to make tax rules uniform, the Ministry of Finance removed that exemption. Now, whenever you pay for an FSSAI license registration (to get a new one or to renew it), or food testing, an extra 18% GST is automatically added to the total cost.

The Mandate: Where 18% GST Applies?

The 18% GST rate is applied to fees processed through the FSSAI FoSCoS portal for the below-mentioned transactions.

• Application fees for Central FSSAI registration, railways, airport/seaport licenses (GST for State Licenses and Registrations is handled via a reverse charge mechanism on the FSSAI FoSCoS portal)
• Late fees/penalties for the renewal of Central license
• Late filing of annual returns
• Registration fees for FSM candidates & permissions for using pre-printed packaging materials
• Any food sample analysis/testing services requested through FSSAI-notified labs

The Exception

The key exceptions apply to Basic & State FSSAI license registrations and associated penalties. These three state-level levies fall under the Reverse Charge Mechanism, and that is why no GST is charged at the time of payment through the FoSCoS portal. 

The FBO is responsible for accounting for the GST in their periodic tax filings, and that makes the immediate transaction complete tax-free at the gateway. The state licensing authorities explicitly detail this exemption on the generated receipts. 

Step-by-Step GST Registration Guide

Securing an FSSAI license and registering for GST will significantly strengthen your food brand’s credibility/reputation and help you build immediate trust with your potential customers. 

Below, we Have Mentioned The Documents You Need:

For Obtaining an FSSAI License

The FBO operator needs:

• Government-issued photo ID (e.g., PAN/Aadhaar/Voter ID/passport)
• Proprietorship declaration/Partnership Deed/COI
• Rental agreement/NOC from the owner/Utility bills

Note: You might need a few supporting documents that include an FSMS plan, list of food categories handled, and bank account details.

For GST Registration

The FBO need to submit:

• PAN of the business/FBO’s PAN
• Aadhaar card/Voter ID/passport of proprietors/partners/directors
• COI/Partnership Deed/Business Registration Document
• Electricity bill/property tax receipt/Rent or lease agreement
• First page of bank passbook/bank statement/a cancelled cheque

How to Apply for an FSSAI License?

If you are still reading this blog, you are likely either an FBO wondering whether to apply for GST registration, or someone looking to start a food business. So, let’s first start by discussing the steps to apply for an FSSAI license in short, and after that, we will also mention the steps to apply for GST registration.

• Visit the official website of the FSSAI FoSCoS portal
• Select your state and define your Kind of Business (Based on your annual turnover & scale, select Basic, State, or Central)
• Fill in Form A & Form B
• Make sure you entered an accurate business name/address/food categories
• Upload your documents (identity, address & business proof)
• Pay the applicable Government fees online
• Click on Submit

You can also track the status of your application online until your certificate is granted. 

Steps to Obtain A GSTIN via the GST Portal

Now, let’s suppose you have already got your FSSAI license and want to apply for GST registration. 

Below are the steps you need to follow for doing so:

• Visit the official GST portal
• Navigate to Services>Registration>New Registration
• Now, select your Taxpayer type, State, & District in Part A
• Provide the legal name of your food business (as per the PAN), email address, & mobile number
• Next, verify your mobile number & email with OTPs
• Now, a TRN should be generated
• After that, log in to the portal using your TRN
• Fill in the detailed sections (regarding business info, promoter details, authorised signatory, principal place of business, & bank account details)
• Upload the scanned copies of the required documents in PDF/JPEG format
• Complete Aadhaar authentication/submit using a DSC/EVC
• At this stage, an ARN will be generated

Once your application gets approved, the GST officer will issue your Form GST REG-06, and you will get your unique 15-digit GSTIN number. 

However, your GST application may get rejected or delayed due to a few minor errors. 

Things to Take Care of While Filing Your GST Application

• Make sure your business name matches the one recorded on your PAN card
• The premises address entered on the FSSAI portal matches the address used in your GST registration
• Your PAN card details must match across all documents 
• Make sure you select the correct food product categories in your FSSAI application that match your business operations
• Ensure your mobile number & email address linked to your PAN/Aadhaar are active because the GST Portal requires real-time OTP authentication

Get Expert Assistance from Us

Obtaining a GSTIN is not mandatory to apply for a Basic FSSAI license, though it is required under specific circumstances. However, if you are having a hard time navigating these complex compliance and application frameworks, do not hesitate to connect with Online Legal India’s certified experts. We can help you with eligibility checks, application, documentation, filing, advisory support, and application tracking for a seamless registration & certification experience. 

Frequently Asked Questions

Q1. Does the FSSAI levy GST on Government license fees?

Ans: Yes, the FSSAI levies 18% GST on Government license fees, but the method of collection varies depending on the type of license. If you are applying for a Central License and Services, you need to pay 18% GST along with the fee directly through the FoSCoS portal. However, FSSAI does not charge GST on State or Basic FSSAI license applications.

Q2. Are FSSAI consultants or agency fees taxable under GST?

Ans: Yes. Since FSSAI consultancy or advisory services are considered professional services, these are taxable under GST and attract a standard 18% GST rate. 

Q3. Is FSSAI registration proof enough to open a business bank account without GST?

Ans: Banks often accept FSSAI registration as one of the valid government-issued proofs of business existence for sole proprietorships. However, most banks may ask for additional business proof depending on their KYC requirements in the name of the sole proprietorship firm. Since FSSAI is only one, combining it with a Udyam MSME certificate and address proof perfectly satisfies this requirement.

Q4. Do small restaurants and caterers need to apply for GST registration?

Ans: Yes. Restaurants and caterers generally become liable for GST registration when their aggregate turnover exceeds the applicable threshold under Section 22 of the CGST Act, subject to the latest notifications and the State in which they operate. 

Q5. What are the penalties for running a food business without an FSSAI license or GST registration?

Ans: Operating a food business without FSSAI & GST registrations in India invites severe consequences. Under Section 63 of the FSS Act, 2006, if an FBO runs a business without an FSSAI license, the individual is liable to pay a fine of up to Rs 5 Lakh and may get imprisoned for up to 6 months. Also, if you fail to apply for GST registration even if your turnover crosses the threshold limit, you will be liable to pay a penalty of Rs 10,000 or 10% of the tax amount evaded (whichever is higher), under Section 122(1) of the CGST Act. Also, if you have intentionally evaded tax, you must pay a penalty that matches the full tax amount evaded, under Section 122(2). Further, tax authorities may initiate detention, seizure or confiscation proceedings wherever permitted under the CGST Act, depending on the facts of the case.  However, most major food delivery platforms generally require a valid FSSAI registration/licence as part of vendor onboarding and operating without it will lead to immediate delisting.

Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal or tax advice. Eligibility for GST registration and FSSAI licensing depends on the applicable laws, notifications, business structure, and facts of each case. Readers should refer to the latest Government notifications or seek professional advice before taking any action.