The GST Registration for Bakery is an important concept. In fact, every business should know about GST. The GST Registration and GST Return Filing offer several advantages. Thus, if you are planning to start a bakery business or already have a bakery business, read this article to know about important concepts for your bakery business. In this article, we will understand the important information regarding GST Registration for Bakery.
What is a Bakery Business?
Bakery Businesses provide baked items for example- Cake, Cupcake, Muffins, Biscuits. The trend of Bakery Business in India is rising as they provide products for wholesale as well as in retail.
Some Bakeries also work as cafes and serve coffee or tea to the customers visiting their shop. One can earn huge profits through establishing a bakery business in India.
What is GST Registration for Bakery?
Everyone must pay taxes on all products and services, the most basic of which is the goods and services tax (GST), which is the process of collecting taxes on behalf of the government. It is imposed on all products and services sold for household or business use. Even though consumers pay GST, the government receives money from businesses that offer products and services.
Thus, as a bakery business having an annual turnover of or more than Rs. 20 Lakhs must get mandatory GST Registration. It is 10 Lakhs in a few special states. However, bakery businesses can also obtain GST Registration voluntarily.
Benefits of GST Registration for Bakery Business
The benefits of GST Registration for Bakery Business are:
- It reduces the tax obligations and the complete GST System is online.
- Branded Snacks have a GST rate of 12% and Cakes have a GST rate of 18%. Thus, you can voluntarily get GST Registration and claim the input tax credit on the tax paid.
- GST allows composition schemes under which you will have to do less GST Return Filing.
- You will need GST Registration to sell bakery products in an e-commerce portal.
Steps to begin Bakery Business in India
You need to follow the steps mentioned below.
- The first step to begin a bakery business in India is to make a summarized plan. It will include the main goal of the bakery, the business entity type, location, appointment of directors or stakeholders, etc.
- The next step is to analyze the competition. For example, if you are opening a bakery retail outlet, research about the number of bakeries already in the area, products they are offering, etc. It will help you make your business unique and attract new customers.
- After you have made the plan of the above steps, it is time to do an operational analysis. Here you will decide the menu, number of items, supplier of the raw materials, etc.
- For every business, planning finances is essential. It, directly and indirectly, impacts the growth and operation of the business. For example, you might miss the growth rate of the business without proper financial planning and not be able to bring the new machinery. Here you might need expert help and also take business loans to accelerate the business expansion. You might need to have a Business Plan Project Report to acquire the business loan.
- You will need to plan a proper marketing plan to attract and boost the bakery business in India so Web Development is required.
Types of GST
There are basically three types of GST:
- CGST(Central Goods and Service Tax)
- IGST (Integrated Goods and Service Tax)
- SGST(States Goods and Service Tax)
Under GST, businesses have to follow the mandatory compliances such as:
- e-Way Bills – It refers to the document or receipt. It contains the information about recipients GSTIN, delivery location, date of e-way bill generated, the value of goods, HSN Code, etc. Without GST Return filing defaulters cannot raise e-way bill and therefore businesses can use GST Billing, eInvoice & Accounting App – InstaBill to generate invoices and e-way bills.
- e- Invoicing – e-Invoicing System is mandatory for businesses having an annual turnover exceeding Rs. 500 Crore in the previous fiscal year. The GST portal itself verifies the authenticity and accuracy of the e-Invoice. You will also have to sign the e-Invoice using Digital Signature Certificate.
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