GST for Home Bakery 2026 – Rates, Registration, ITC & Complete Compliance Guide
Complete GST guide for home bakers, home-based cake businesses, and small-scale bakery operations in India. GST 2.0 rates on home-baked goods (5% on cakes and pastries, 0% on plain bread), FSSAI requirements, composition scheme, ITC rules, and platform compliance.
Quick Summary – GST for Home Bakery
- GST Rate on Home-Baked Goods (2026): 5% on cakes, pastries, biscuits, rusks, and other bakery wares (reduced from 18% under GST 2.0, effective 22 September 2025). 0% on plain bread and Indian breads.
- GST on Chocolates & Confectionery: 5% on chocolates, sugar-boiled confectionery, jams, and milk-based beverages.
- Registration Threshold: ₹40 lakh for goods (normal states); ₹20 lakh for services. ₹20 lakh / ₹10 lakh in special category states. Registration is mandatory for platform onboarding.
- Composition Scheme: Available for home bakers with turnover up to ₹1.5 crore. Manufacturers pay 1% GST; restaurant service (outlet-prepared) pay 5% GST.
- ITC: Available on raw materials (flour, sugar, milk, eggs) and capital goods for registered home bakers under the regular scheme.
- FSSAI Registration: Mandatory for all home bakers — Basic FSSAI Registration (turnover below ₹12 lakh) or State FSSAI License (turnover above ₹12 lakh).
Takeaway: Home-baked goods attract 5% GST (0% on plain bread). Registration is mandatory if turnover exceeds ₹40 lakh for goods or for platform onboarding. FSSAI registration is separately mandatory for all home bakers.
1. Introduction – GST for Home Bakers in India
The home baking industry in India has witnessed remarkable growth, driven by social media, delivery platforms, and the rising demand for customised cakes, artisanal breads, and gourmet pastries. India is home to an estimated 15 lakh home bakers operating across the country, with many transitioning from hobby bakers to full-fledged home-based businesses.
For home bakers, Goods and Services Tax (GST) compliance is a critical business function. The 56th GST Council meeting, effective 22 September 2025, introduced landmark reforms under GST 2.0 that unified GST rates for most bakery and confectionery products at 5%, significantly reducing the earlier 18% rate on cakes and pastries. Plain bread and Indian breads were moved to the 0% slab, making them completely tax-free.
However, home bakers face a unique compliance landscape. Unlike traditional bakeries with physical storefronts, home bakers often operate from residential kitchens, sell through Instagram, WhatsApp, and delivery platforms, and must navigate both GST registration and FSSAI licensing requirements. The treatment of platform orders under Section 9(5) creates further compliance obligations for those using Swiggy or Zomato.
This comprehensive guide covers GST rates on home-baked goods, FSSAI registration requirements, registration thresholds, the composition scheme, Input Tax Credit rules, Section 9(5) compliance for platform orders, return filing, and common pitfalls for home bakers.
Takeaway: Home bakers must comply with both GST and FSSAI regulations. GST applies at 5% on most baked goods, with registration mandatory above the threshold or for platform onboarding.
2. GST 2.0 Rates on Home-Baked Goods (2026)
Under GST 2.0, home-baked goods have a simplified rate structure. The table below summarises the applicable GST rates for various home bakery products.
| Product Category | HSN Code | GST Rate (2026) | Old Rate |
|---|---|---|---|
| Plain Bread | 1905 | 0% (Exempt) | 5% |
| Cakes & Pastries | 1905 | 5% | 18% |
| Biscuits & Cookies | 1905 | 5% | 18% |
| Rusks & Toasted Bread | 1905 | 5% | 5% |
| Chocolates & Cocoa Preparations | 1806 | 5% | 18% |
| Sugar-Boiled Confectionery | 1704 | 5% | 12% |
| Jams, Jellies, Marmalades | 2007 | 5% | 12% |
| Milk-Based Beverages | 2202 | 5% | 12% |
Key Changes Under GST 2.0 for Home Bakers
Takeaway: Most home-baked goods attract 5% GST. Plain bread and Indian breads are exempt (0%). Update your billing systems to reflect these rates.
3. FSSAI Registration for Home Bakers – Mandatory Requirement
Unlike GST, which has a turnover threshold, FSSAI registration is mandatory for every food business operator in India, regardless of turnover. Home bakers fall under the FSSAI licensing framework and must obtain the appropriate registration.
| Turnover | FSSAI Registration Type | Validity |
|---|---|---|
| Below ₹12 lakh per year | Basic FSSAI Registration | 1 to 5 years |
| ₹12 lakh to ₹20 crore per year | State FSSAI License | 1 to 5 years |
| Above ₹20 crore per year | Central FSSAI License | 1 to 5 years |
FSSAI Registration Process for Home Bakers
Takeaway: Every home baker must obtain FSSAI registration before starting operations. Basic registration for turnover below ₹12 lakh; State license above ₹12 lakh.
4. GST Registration for Home Bakers – Eligibility & Threshold
Under Section 22 of the CGST Act, 2017, registration is mandatory for home bakers if the aggregate turnover exceeds the prescribed limit.
| Business Type | Normal States | Special Category States |
|---|---|---|
| Home Bakers (Goods – Cakes, Biscuits) | ₹40 lakh | ₹20 lakh |
| Home Bakers (Services – Outlet-Prepared) | ₹20 lakh | ₹10 lakh |
| Home Bakers on Swiggy/Zomato | Assess threshold + platform requirements | Assess threshold + platform requirements |
Mandatory Registration Cases for Home Bakers
Voluntary Registration: Even if turnover is below the threshold, voluntary registration may be beneficial for claiming ITC on raw materials and building business credibility.
Takeaway: If your turnover exceeds ₹40 lakh (goods) or ₹20 lakh (services), GST registration is mandatory. Platform onboarding often requires GSTIN.
5. Step‑by‑Step GST Registration Process for Home Bakers
Takeaway: Keep FSSAI registration, Aadhaar, and bank details ready before starting the application.
6. Documents Required for GST Registration – Home Bakery
- PAN Card of the business / proprietor.
- Aadhaar Card of the proprietor.
- Proof of business address (rent agreement, electricity bill, or property tax receipt).
- Bank account details (cancelled cheque or bank statement).
- FSSAI Registration Certificate (Basic or State).
- Photographs of the home kitchen premises.
- Digital Signature Certificate – mandatory for companies and LLPs.
Takeaway: Maintain updated FSSAI registration and home address proof for GST registration.
7. Composition Scheme for Home Bakers – Eligibility & Conditions
The Composition Scheme is a simplified GST option for small home bakers. The applicable rate depends on whether the home baker is classified as a manufacturer or a restaurant service provider.
| Home Baker Category | Composition GST Rate | Eligibility |
|---|---|---|
| Home Baker Manufacturer (Cakes, Biscuits, Bread) | 1% (0.5% CGST + 0.5% SGST) | Turnover up to ₹1.5 crore |
| Home Baker Restaurant Service (Outlet-Prepared) | 5% (2.5% CGST + 2.5% SGST) | Turnover up to ₹1.5 crore |
Restrictions under Composition Scheme
- ❌ Cannot make inter-state supplies – Sales must be within the same state.
- ❌ Cannot claim ITC – All input GST becomes a permanent cost.
- ❌ Cannot sell through e-commerce platforms – Home bakers on Swiggy/Zomato cannot opt for composition.
- ❌ Cannot deal in excluded goods – Ice cream, pan masala, tobacco, etc.
Takeaway: Home bakers can opt for composition at 1% (manufacturer) or 5% (restaurant). Choose based on your business model and turnover.
8. Input Tax Credit (ITC) for Home Bakers – Rules & Restrictions
Input Tax Credit (ITC) allows home bakers to reduce tax liability by claiming credit for GST paid on raw materials and capital goods.
| Home Baker Type | GST Rate | ITC Availability |
|---|---|---|
| Home Baker Goods (Manufacturer) | 5% | ✅ Yes (for goods) |
| Home Baker Restaurant Service | 5% | ❌ No (restaurant service) |
| Composition Scheme Home Baker | 1% / 5% | ❌ No |
ITC on Raw Materials and Capital Goods
ITC Reversal for Expired Goods
- ❌ Expired Cakes & Pastries: ITC on inputs used in manufacturing expired cakes and pastries must be reversed under Section 17(5)(h) of the CGST Act.
Conditions for Claiming ITC
- Valid Tax Invoice: Must contain GSTIN, HSN, and tax amounts.
- Receipt of Goods/Services: Claim only after actual receipt.
- Tax Paid to Government: Supplier must have deposited the tax.
- Return Filing: Must be claimed in GSTR‑3B by the due date.
Takeaway: Home bakers selling goods at 5% can claim ITC on raw materials. Home bakers providing restaurant service cannot claim ITC. Expired goods require ITC reversal.
9. Section 9(5) Compliance for Home Bakers – Swiggy & Zomato Orders
Many home bakers sell through delivery platforms like Swiggy and Zomato. Under GST, these platforms have specific compliance responsibilities under Section 9(5) of the CGST Act.
How GST Works on Zomato / Swiggy Orders
- Platform Collects GST: The e-commerce operator collects and pays 5% GST on the food order on behalf of the home baker.
- Home Baker Reporting: The home baker must still report these platform sales in its GSTR-3B return as exempt supplies.
- Delivery Fee: The delivery fee charged by the platform attracts 18% GST.
- Home Baker's GST Liability: Since the platform pays GST under Section 9(5), the home baker does not separately pay GST on platform orders.
Home Baker's Compliance Obligations
Takeaway: Platforms collect and pay GST on food orders under Section 9(5). Home bakers must still register and report platform sales. Composition scheme is not available if using platforms.
10. GST Returns Filing for Home Bakers
Home bakers must file GST returns based on their chosen scheme – regular or composition.
| Return | Description | Due Date |
|---|---|---|
| GSTR-1 | Outward supplies (sales) – regular scheme | 11th of following month |
| GSTR-3B | Summary return with ITC and payment – regular scheme | 20th of following month |
| CMP-08 | Quarterly statement for composition scheme | 18th of month after quarter |
| GSTR-4 | Annual return for composition scheme | 30 June |
| GSTR-9 | Annual return – regular scheme | 31 December |
Key Reporting Requirements
Takeaway: File returns on time to avoid late fees of ₹50 per day and interest on unpaid tax. Report platform sales correctly.
11. Common GST Mistakes by Home Bakers & Solutions
✅ Solution: Cakes and pastries attract 5% GST under GST 2.0. Update billing systems.
✅ Solution: FSSAI registration is mandatory for all home bakers. Apply on FoSCoS portal.
✅ Solution: Report all platform sales separately in GSTR-1 and GSTR-3B as exempt supplies.
✅ Solution: ITC is not available on restaurant service. Claim ITC only on goods portion.
✅ Solution: Reverse ITC on inputs used in expired cakes and pastries under Section 17(5)(h).
✅ Solution: File GSTR-9 by 31 December and GSTR-4 by 30 June.
Takeaway: Correct rate application, proper FSSAI compliance, and timely filing are the keys to error-free compliance.
12. Penalties & Risks for Non‑Compliant Home Bakers
Takeaway: Apply correct GST rates and maintain FSSAI compliance to avoid penalties.
13. Industry‑Specific GST Insights for Home Bakers
5% GST on cakes. Register if turnover exceeds threshold or for platform onboarding. FSSAI Basic Registration required.
Platform pays GST under Section 9(5). Report platform sales as exempt in GSTR-3B. GSTIN required for onboarding.
0% GST on plain bread. 5% on rusks and toasted bread. ITC on flour, packaging, and capital goods.
Dual classification for goods and restaurant service. Separate invoice series required. ITC reversal for restaurant portion.
B2B supplies require GSTIN. 5% GST on baked goods. ITC available on raw materials and packaging.
Maintain HSN-wise records for all products. Different GST rates apply (0% bread, 5% cakes, etc.).
Takeaway: Tailor your GST and FSSAI compliance based on your home bakery type – custom cakes, platform-based, or corporate supplies.
14. Comparison: Regular vs Composition Scheme for Home Bakers
| Parameter | Regular Scheme | Composition Scheme |
|---|---|---|
| Turnover Limit | No limit | Up to ₹1.5 crore |
| GST Rate (Manufacturer) | 5% on goods | 1% on turnover |
| GST Rate (Restaurant) | 5% on services | 5% on turnover |
| ITC Availability | ✅ Yes (goods portion) | ❌ No |
| Inter-State Sales | ✅ Allowed | ❌ Not allowed |
| Platform Sales | ✅ Allowed | ❌ Not allowed |
| Returns | Monthly (GSTR-1, GSTR-3B) | Quarterly (CMP-08) + Annual (GSTR-4) |
Takeaway: Regular scheme offers ITC and flexibility; composition suits small, intra-state home bakers without platform sales.