GST for Sweet Shop 2026 – Rates, Registration, ITC & Complete Compliance Guide
Complete GST guide for sweet shops, mithai shops, halwai businesses, and Indian sweet retailers in India. GST 2.0 rates on mithai, kaju katli, rasgulla, soan papdi, dry fruit sweets, and namkeen. Registration thresholds, composition scheme, ITC rules, HSN codes, and compliance essentials.
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Quick Summary – GST for Sweet Shop
- GST Rate on Sweets & Mithai (2026): 5% on all sweets, mithai, and Indian desserts sold loose or pre-packaged – including kaju katli, rasgulla, gulab jamun, and soan papdi.
- GST on Dry Fruit Sweets & Chocolates: 5% on dry fruit sweets, chocolates, and sugar-boiled confectionery (reduced from 18% under GST 2.0).
- GST on Namkeen & Bhujia: 5% on namkeen, bhujia, and extruded snacks (reduced from 12% under GST 2.0).
- Registration Threshold: ₹40 lakh for goods (normal states); ₹20 lakh for special category states. Registration is mandatory for platform sales.
- Composition Scheme: Available for sweet shops with turnover up to ₹1.5 crore. Manufacturers pay 1% GST.
- ITC: Available on sugar, khoya, dry fruits, ghee, packaging, and capital goods for registered shops under the regular scheme.
Takeaway: Sweet shops charge 5% GST on all sweets, mithai, namkeen, and dry fruit sweets under GST 2.0. Registration is mandatory if turnover exceeds ₹40 lakh. Maintain HSN-wise records for accurate compliance.
1. Introduction – GST for Sweet Shops in India
The Indian sweet shop industry – locally known as "halwai shops" or "mithai shops" – is one of the most culturally significant and economically important segments of India's food sector. From traditional neighbourhood sweet shops and family-run halwai businesses to premium mithai boutiques and large-scale sweet manufacturers, this sector serves millions of customers daily, with demand peaking during festivals like Diwali, Raksha Bandhan, and weddings.
For sweet shop owners, 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 sweets, namkeen, and confectionery at 5%, significantly reducing the earlier 12% and 18% rates on many items. This reform brought significant relief to both sweet shop owners and their customers.
This comprehensive guide covers GST rates on sweets and mithai, HSN codes, registration thresholds, the composition scheme, Input Tax Credit rules, common compliance pitfalls, and an extensive list of mistakes and solutions tailored specifically for sweet shops.
Takeaway: Sweet shops attract 5% GST on all sweets, mithai, namkeen, and dry fruit sweets under GST 2.0. Registration is mandatory if turnover exceeds ₹40 lakh.
2. GST 2.0 Rates on Sweets & Mithai (2026)
Under GST 2.0, sweets and mithai have a simplified rate structure. The table below summarises the applicable GST rates for various sweet shop products.
| Product Category | HSN Code | GST Rate (2026) | Old Rate |
|---|---|---|---|
| Milk-Based Sweets (Rasgulla, Gulab Jamun, Barfi) | 0402/2106 | 5% | 5% |
| Kaju Katli, Dry Fruit Sweets | 1704/2008 | 5% | 18% |
| Sugar-Boiled Confectionery | 1704 | 5% | 12% |
| Chocolates & Cocoa Preparations | 1806 | 5% | 18% |
| Namkeen, Bhujia, Extruded Snacks | 1905/2106 | 5% | 12% |
| Soan Papdi, Mysore Pak, Halwa | 1704 | 5% | 5% |
| Jams, Jellies, Marmalades | 2007 | 5% | 12% |
| Packaged Milk-Based Beverages | 2202 | 5% | 12% |
Key Changes Under GST 2.0 for Sweet Shops
Example – Sweet Shop Invoice: A customer buys 1 kg kaju katli worth ₹800 and 500g namkeen worth ₹150. Kaju katli GST @5% = ₹40. Namkeen GST @5% = ₹7.50. Total bill = ₹997.50.
Takeaway: All sweets, mithai, namkeen, and dry fruit sweets attract 5% GST under GST 2.0. Update your billing systems to reflect these rates.
3. GST Registration for Sweet Shops – Eligibility & Threshold
Under Section 22 of the CGST Act, 2017, registration is mandatory for sweet shops if the aggregate turnover exceeds the prescribed limit.
| Business Type | Normal States | Special Category States |
|---|---|---|
| Sweet Shop (Goods – Mithai, Namkeen) | ₹40 lakh | ₹20 lakh |
| Sweet Shop with Restaurant Service | ₹20 lakh | ₹10 lakh |
| Sweet Shop on Swiggy/Zomato | Mandatory regardless of turnover | Mandatory |
| Inter-State Sweet Distribution | Mandatory regardless of turnover | Mandatory |
Mandatory Registration Cases for Sweet Shops
Voluntary Registration: Even if turnover is below the threshold, voluntary registration may be beneficial for claiming ITC on raw materials (sugar, khoya, dry fruits, ghee) and building business credibility with corporate clients.
Takeaway: If your turnover exceeds ₹40 lakh, GST registration is mandatory. Platform onboarding requires GSTIN regardless of turnover.
4. Step‑by‑Step GST Registration Process for Sweet Shops
1 Visit the GST Portal and select 'New Registration'.
2 Fill Part A with legal name, PAN, email, and mobile – verify via OTP.
3 Receive the Temporary Reference Number on email/mobile.
4 Log in with TRN and complete FORM GST REG‑01 with business, principal place, and bank details.
5 Upload required documents – PAN, address proof, bank details, FSSAI license, and photographs.
6 Complete Aadhaar authentication or physical verification.
7 GSTIN is issued within 3‑7 working days.
Takeaway: Keep FSSAI license, shop address proof, and bank details ready before starting the application.
5. Documents Required for GST Registration – Sweet Shop
- PAN Card of the business / proprietor / partners.
- Aadhaar Card of all promoters / partners.
- Proof of business address (rent agreement, electricity bill, or property tax receipt).
- Bank account details (cancelled cheque or bank statement).
- FSSAI License (mandatory for all food businesses).
- Shop ownership or rent agreement.
- Photographs of the shop premises.
- Digital Signature Certificate – mandatory for companies and LLPs.
Takeaway: Maintain updated FSSAI license and shop address proof for GST registration.
6. Composition Scheme for Sweet Shops – Eligibility & Conditions
The Composition Scheme is a simplified GST option for small sweet shops. Under this scheme, eligible sweet shops pay a flat 1% GST on turnover (0.5% CGST + 0.5% SGST) with no ITC benefits.
| Parameter | Details |
|---|---|
| Eligibility | Sweet shops with turnover up to ₹1.5 crore (₹75 lakh in special category states) |
| GST Rate | 1% on turnover (0.5% CGST + 0.5% SGST) |
| ITC | ❌ Not available on any inputs, input services, or capital goods |
| Invoicing | Bill of Supply (cannot collect GST separately from customers) |
| Returns | CMP-08 (quarterly) + GSTR-4 (annual) |
| Board Display | Must display "Composition Taxable Person, Not Eligible to Collect Tax" |
Restrictions under Composition Scheme
- ❌ Cannot make inter-state supplies – Sales must be within the same state.
- ❌ Cannot sell through e-commerce platforms – Sweet shops on Swiggy/Zomato/Amazon cannot opt for composition.
- ❌ Cannot deal in excluded goods – Ice cream, pan masala, tobacco, etc.
- ❌ Cannot claim ITC – All input GST becomes a permanent cost.
Example – Composition Scheme: A sweet shop with turnover of ₹90 lakh opts for the composition scheme. GST payable = 1% of ₹90 lakh = ₹90,000 (₹45,000 CGST + ₹45,000 SGST). The shop cannot claim ITC on sugar, khoya, or rent but benefits from simplified quarterly filing.
Takeaway: Composition scheme is ideal for small, intra-state sweet shops that do not need ITC and do not sell on platforms. It offers lower compliance burden but no ITC benefits.
7. Input Tax Credit (ITC) for Sweet Shops – Rules & Restrictions
Input Tax Credit (ITC) allows sweet shops to reduce tax liability by claiming credit for GST paid on raw materials and capital goods.
| Sweet Shop Type | GST Rate | ITC Availability |
|---|---|---|
| Sweet Shop (Manufacturer / Trader) | 5% | ✅ Yes (for goods) |
| Sweet Shop with Restaurant Service | 5% | ❌ No (restaurant service) |
| Composition Scheme Sweet Shop | 1% | ❌ No |
ITC on Raw Materials and Capital Goods
ITC Reversal for Expired Goods
- ❌ Expired Sweets: ITC on inputs used in manufacturing expired sweets must be reversed under Section 17(5)(h) of the CGST Act.
- ❌ Spoilage / Wastage: Inputs lost to spoilage or wastage may attract ITC reversal.
- ❌ Free Samples: Free samples distributed for promotion attract ITC reversal as they are treated as non-business use.
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.
- Supplier Filing: Supplier must have filed GSTR-1 for the ITC to reflect in GSTR-2B.
Takeaway: Sweet shops selling goods at 5% can claim ITC on raw materials and equipment. Expired goods and free samples require ITC reversal.
8. Common GST Mistakes by Sweet Shops & Practical Solutions
Sweet shops face unique compliance challenges due to the nature of their products, high-volume cash transactions, and festival-driven demand. Below is an expanded list of real problems and their solutions, based on actual cases faced by sweet shop owners.
8.1 Rate Classification Mistakes
Mistake 1: Charging 18% GST on Kaju Katli and Dry Fruit Sweets
Many sweet shops still charge the old 18% rate on premium sweets like kaju katli, badam barfi, and pista rolls.
Under GST 2.0 (effective 22 September 2025), all dry fruit sweets attract 5% GST. Update your billing software and rate masters immediately. Issue revised rate charts at counters.
Mistake 2: Charging 12% GST on Namkeen and Bhujia
Sweet shops selling namkeen, bhujia, and extruded snacks often continue charging the old 12% rate.
Namkeen, bhujia, and extruded snacks were reduced to 5% under GST 2.0. Update invoicing immediately. If you have charged 12% erroneously, refund the excess to customers or issue credit notes.
Mistake 3: Charging 5% GST on Cold Drinks and Carbonated Beverages
Sweet shops that also sell cold drinks apply the same 5% rate to the entire bill, including carbonated beverages.
Carbonated and caffeinated beverages attract 40% GST. Bill them separately at 40%. The rest of the items remain at 5%. This is the most common error during festival seasons.
Mistake 4: Applying 5% GST on Paneer and Dairy-Based Products Sold Separately
Some sweet shops sell paneer, dahi, and milk separately, treating them as sweets.
Plain paneer, dahi, and fresh milk attract 0% GST (exempt). Processed cheese attracts 12%. Ensure HSN-wise billing for accurate classification. Do not apply 5% to exempt items.
Mistake 5: Charging GST on Loose Mithai Sold Without Packaging
Some shop owners think loose mithai without packaging should be tax-free.
GST applies regardless of packaging. All mithai, whether loose or packaged, attracts 5% GST. However, if the shop's turnover is below ₹40 lakh, no GST registration is required, so no GST is charged.
Mistake 6: Using Wrong HSN Codes on Invoices
Using vague HSN codes like "9804" or "9999" for all sweet items.
Use specific HSN codes: 1704 for sugar-boiled confectionery, 2106 for milk-based sweets, 1806 for chocolates, 1905 for namkeen. Correct HSN codes are mandatory for accurate GST reporting and audits.
8.2 Invoicing and Billing Mistakes
Mistake 7: Not Issuing Invoices for Small Purchases Below ₹200
Many sweet shops skip invoices for small walk-in customers.
Issue invoices for all B2B transactions. For B2C transactions below ₹200, a simplified invoice suffices, but records must still be maintained. Not issuing invoices can trigger penalties and hide taxable turnover.
Mistake 8: Mixing GST Rates on a Single Invoice Without Separate Line Items
Combining sweets (5%) with cold drinks (40%) on a single line item and charging 5%.
Each product must be a separate line item on the invoice with its own HSN code and GST rate. This is critical for composite bills containing sweets, namkeen, and cold drinks.
Mistake 9: Not Issuing Credit Notes for Returns
When customers return sweets (rare but happens with bulk orders), shops do not issue credit notes.
Issue credit notes referencing the original invoice. This reduces taxable turnover and GST liability. Without credit notes, GST must be paid on returned goods.
Mistake 10: Missing Customer GSTIN on B2B Invoices
Not recording GSTIN of corporate clients on B2B invoices.
Always record the customer's GSTIN on B2B invoices. Without GSTIN, the customer cannot claim ITC, and the transaction may be treated as B2C. This affects reporting in GSTR-1.
Mistake 11: Not Printing "Composition Taxable Person" on Bills
Composition scheme sweet shops do not print the mandatory declaration.
Composition dealers must print "Composition Taxable Person, Not Eligible to Collect Tax" on every bill. Failure attracts penalties. Also display this at the shop entrance.
Mistake 12: Charging GST Separately on Composition Scheme Bills
Composition dealers charging GST on bills in addition to their 1% turnover tax.
Composition dealers cannot charge GST separately on bills. They issue a "Bill of Supply" and pay 1% tax from their turnover. Charging GST separately is illegal and attracts penalties.
8.3 ITC and Input Purchase Mistakes
Mistake 13: Claiming ITC on Inputs Used in Expired Sweets
Sweet shops claim ITC on khoya, milk, and dry fruits used in sweets that later expired or spoiled.
ITC must be reversed under Section 17(5)(h) on inputs used in goods that are written off, expired, or destroyed. Maintain a wastage register and reverse ITC proportionately in the month of write-off.
Mistake 14: Claiming ITC on Free Samples Distributed
Claiming ITC on inputs used for free samples distributed during festivals or promotions.
Free samples are treated as non-business use or gifts. ITC must be reversed on such inputs. Maintain a separate register for samples and reverse ITC accordingly.
Mistake 15: Claiming ITC Without Verifying GSTR-2B
Claiming ITC based on invoices received but not verified against GSTR-2B.
Always reconcile ITC claims with GSTR-2B before filing GSTR-3B. If supplier has not filed GSTR-1, ITC will be rejected. Under the Invoice Management System (IMS) effective April 2026, this becomes even more critical.
Mistake 16: Missing the 30 November ITC Claim Deadline
Claiming ITC for previous financial years after 30 November of the following year.
ITC for any invoice must be claimed by 30 November of the following financial year or the date of annual return, whichever is earlier. Missing this deadline results in permanent loss of ITC.
Mistake 17: Not Claiming ITC on Shop Rent and Electricity
Sweet shop owners think ITC is only available on raw materials.
ITC is available on shop rent (if landlord is GST registered), electricity (from registered suppliers), packaging materials, capital goods, and professional services. Claim all eligible ITC.
Mistake 18: Claiming ITC on Diwali Gifts to Customers
Claiming ITC on sweets and dry fruits given as festival gifts to clients.
ITC on goods given as gifts or free samples is not allowed. Reverse ITC on such items. The value of gifts is also disallowed as a business expense for income tax purposes.
8.4 Composition Scheme Mistakes
Mistake 19: Remaining in Composition Scheme After Exceeding Turnover Limit
Continuing composition scheme after turnover crosses ₹1.5 crore.
Transition to regular scheme in the month following the breach. Apply for cancellation of composition or opt-out by filing Form CMP-04 within 7 days. Failure attracts penalty equal to the tax evaded.
Mistake 20: Selling Through Amazon/Flipkart While in Composition
Selling packaged sweets online through e-commerce platforms while still under composition scheme.
Composition scheme is not available for e-commerce sellers. Immediately switch to regular scheme. If sales already occurred, pay differential tax with interest.
Mistake 21: Making Inter-State Sales Under Composition Scheme
Supplying sweets to customers or distributors in other states while in composition.
Inter-state supplies are prohibited under composition. For such transactions, pay IGST at regular rates. Better to exit composition if inter-state supplies are frequent.
Mistake 22: Not Displaying Composition Board at Shop
Not displaying the mandatory "Composition Taxable Person" board at the shop.
Display the board prominently at the shop entrance and on all bills. Non-compliance attracts a penalty of ₹10,000 or the tax amount, whichever is higher.
8.5 Festival Season and Bulk Order Mistakes
Mistake 23: Not Maintaining Records During Diwali/Raksha Bandhan Rush
Sweet shops get overwhelmed during festival rush and skip proper record-keeping.
Hire temporary billing staff, use cloud-based POS systems, and issue invoices even during peak season. After the festival, reconcile GSTR-1 with POS data. Post-festival reconciliation prevents notice demands.
Mistake 24: Not Issuing E-Way Bills for Bulk Sweet Dispatch
Not generating e-way bills when dispatching bulk sweets to corporate clients or other outlets.
E-way bill is required for movement of goods exceeding ₹50,000. Generate e-way bill before dispatch. Ensure vehicle number and transporter details are accurate to avoid detention.
Mistake 25: Not Reporting Corporate Bulk Orders as B2B
Corporate orders are reported as B2C instead of B2B.
Report all corporate orders as B2B in GSTR-1 with the customer's GSTIN. This ensures the customer can claim ITC and avoids discrepancies in GSTR-1 vs GSTR-3B reconciliation.
Mistake 26: Not Accounting for Advance Payments Received Before Festival Delivery
Taking advance payments for festival sweets but not paying GST on advances (if applicable).
For goods, GST is payable on invoice date, not on advance. However, if invoice is raised on receiving advance, GST is payable. Track advances carefully and reconcile with invoices.
Mistake 27: Not Reporting Sales Through Own Website or WhatsApp
Sales through direct website or WhatsApp are not captured in GST returns.
All sales through own channels (website, WhatsApp, phone orders) must be reported in GSTR-1. These are B2C sales and form part of taxable turnover. Online payment records help reconciliation.
8.6 Miscellaneous Compliance Mistakes
Mistake 28: Not Paying GST on Sweet Samples Consumed in Trial Runs
Trial runs and quality checks use raw materials without accounting for the same.
Raw materials consumed in trial runs must be accounted for. If the final product is not sold, the ITC on inputs is either reversed or the trial product is treated as non-business use. Maintain a trial-run register.
Mistake 29: Not Reversing ITC on Wastage During Manufacturing
High wastage during sweet manufacturing is not accounted for.
Under Rule 42, ITC on inputs consumed in wastage must be reversed. Maintain detailed production records showing input quantity, output quantity, and wastage percentage. Reverse ITC on wastage portion.
Mistake 30: Not Paying GST Under Reverse Charge on GTA Services
Sweet shops hiring transporters for dispatch do not pay GST under RCM.
When a sweet shop hires a GTA (Goods Transport Agency), GST under RCM at 5% (without ITC) or 18% (with ITC) must be paid by the shop. This is a common compliance gap. Issue self-invoice and pay GST in GSTR-3B.
Mistake 31: Not Updating Shop Address in GST Registration After Relocation
Moving to a new shop premises without updating GST registration.
File Form GST REG-14 within 15 days of address change. Failure attracts penalty of ₹25,000. Update the address on invoices, board, and FSSAI license as well.
Mistake 32: Not Filing Nil Returns During Temporary Closure
Closing shop temporarily due to festival holidays or renovation and skipping GST returns.
File NIL returns during closure. Non-filing of NIL returns attracts late fees of ₹20 per day (₹10 CGST + ₹10 SGST) for NIL returns. After 30 days of default, returns cannot be filed without paying all pending dues.
Mistake 33: Not Reconciling Cash Sales with Bank Deposits
High cash sales are not reconciled with bank deposits, leading to GST reconciliation issues.
Maintain daily cash registers and deposit cash regularly into the business account. GST returns must match with the deposits in the bank. Non-reconciliation can trigger income tax and GST scrutiny.
Mistake 34: Not Informing Suppliers to File GSTR-1
Sweet shops purchase raw materials from suppliers who delay filing GSTR-1, blocking ITC.
Regularly monitor GSTR-2B for missing invoices. Follow up with suppliers to file GSTR-1 within the due date. Consider blacklisting non-compliant suppliers. Under IMS, reject invalid invoices immediately.
Mistake 35: Not Maintaining Production Records for Purity and GST Audit
Sweet shops do not maintain production records showing input-output ratios.
Maintain monthly production registers with details of raw materials consumed, output produced, and wastage. These are essential for FSSAI audits, GST audits, and ITC reconciliation. Software-based recording is recommended.
Takeaway: Most GST mistakes by sweet shops arise from incorrect rate application, poor invoicing, and ITC mismanagement. A disciplined approach to record-keeping, regular reconciliation, and staff training prevents the majority of compliance issues.
9. Penalties & Risks for Non‑Compliant Sweet Shops
Case Study: A sweet shop charged 18% GST on kaju katli for 6 months after GST 2.0. The department issued a notice demanding excess tax collected, plus interest and penalties. Customer complaints escalated the matter.
Takeaway: Apply correct GST rates and maintain accurate records to avoid penalties and customer disputes.
10. Industry‑Specific GST Insights for Sweet Shops
Traditional Neighbourhood Sweet Shops
5% GST on all sweets and namkeen. Register if turnover exceeds ₹40 lakh. Composition at 1% for small shops.
Premium Mithai Boutiques
5% GST on dry fruit sweets and kaju katli. ITC on premium ingredients. Maintain HSN-wise records.
Sweet Shops with Restaurant Service
Dual classification: 5% GST on sweets (goods), 5% on restaurant service. ITC on goods portion only.
Sweet Shops on Swiggy/Zomato
5% GST via Section 9(5) on platform orders. Report as exempt supplies. Cannot opt for composition.
Sweet Manufacturers & Wholesalers
5% GST on wholesale supply. ITC on sugar, khoya, dry fruits, and packaging. E-way bill for bulk dispatches.
Festival Season Sweet Shops
5% GST during Diwali, Raksha Bandhan. Maintain extra records. Corporate bulk orders treated as B2B with GSTIN.
Takeaway: Tailor your GST compliance based on your sweet shop type – traditional, premium, restaurant-hybrid, or platform-based.
11. Comparison: Regular vs Composition Scheme for Sweet Shops
| Parameter | Regular Scheme (5% GST) | Composition Scheme (1%) |
|---|---|---|
| Turnover Limit | No limit | Up to ₹1.5 crore |
| GST Rate | 5% on sweets | 1% on turnover |
| ITC Availability | ✅ Yes | ❌ No |
| Inter-State Sales | ✅ Allowed | ❌ Not allowed |
| E-Commerce Sales | ✅ Allowed | ❌ Not allowed |
| Returns | Monthly (GSTR-1, GSTR-3B) | Quarterly (CMP-08) + Annual (GSTR-4) |
| Invoice | Tax Invoice with 5% GST | Bill of Supply (no GST collected) |
Takeaway: Regular scheme offers ITC and flexibility; composition suits small, intra-state sweet shops with direct sales only.
12. Frequently Asked Questions – GST for Sweet Shop
Yes – all sweets, mithai, and Indian desserts attract 5% GST under GST 2.0 (effective 22 September 2025). This applies to loose sweets, packaged sweets, and pre-packaged items sold in sweet shops.
The GST rate on mithai and sweets is 5% across all categories – including milk-based sweets (rasgulla, gulab jamun), dry fruit sweets (kaju katli, badam barfi), and sugar-boiled confectionery.
Sweets attract 5% GST under GST 2.0. Before 22 September 2025, dry fruit sweets and chocolates were charged 18%, but the rate was reduced to 5% under GST 2.0.
Yes – kaju katli, badam barfi, pista rolls, and other dry fruit sweets attract 5% GST. The earlier 18% rate was reduced to 5% under GST 2.0, providing significant relief.
Milk-based sweets such as rasgulla, gulab jamun, and milk barfi attract 5% GST. These are classified under HSN codes 0402 or 2106 based on packaging and shelf life.
GST registration is mandatory for sweet shops if aggregate turnover exceeds ₹40 lakh in normal states or ₹20 lakh in special category states. Registration is also mandatory for platform sales (Swiggy, Zomato, Amazon) regardless of turnover.
Yes – GST applies to all sweets, whether sold loose or packaged, at 5%. However, if your shop's turnover is below the registration threshold (₹40 lakh), no GST registration is required, and no GST is charged.
Soan papdi, mysore pak, and halwa attract 5% GST under HSN code 1704 (sugar-boiled confectionery). The rate is unchanged from before GST 2.0.
Yes – sweet shops selling sweets as goods at 5% GST can claim ITC on raw materials (sugar, khoya, ghee, dry fruits), packaging materials, shop rent, and equipment. However, ITC on inputs used in expired goods or free samples must be reversed.
Sweet shops under the composition scheme pay 1% GST (0.5% CGST + 0.5% SGST) on turnover up to ₹1.5 crore. They cannot claim ITC, make inter-state sales, or sell through e-commerce platforms.
Yes – namkeen, bhujia, and extruded snacks attract 5% GST under GST 2.0. The earlier 12% rate was reduced to 5%, providing relief to both sweet shops and customers.
Carbonated and caffeinated beverages sold in sweet shops attract 40% GST under GST 2.0 (moved from 28%). Bill them separately from sweets to avoid rate mixing errors.
If your turnover is below ₹40 lakh, GST registration is not mandatory. However, voluntary registration is recommended if you want to claim ITC on raw materials, supply to corporate clients, or sell on e-commerce platforms.
Common HSN codes: 1704 for sugar-boiled confectionery (soan papdi, mysore pak), 2106 for milk-based sweets (rasgulla, gulab jamun), 1806 for chocolates, 1905 for namkeen and extruded snacks.
Yes – sweets sold as Diwali gifts or corporate gifts attract 5% GST on the invoice value. If given as free samples or promotional gifts, ITC on inputs must be reversed.
Regular scheme: GSTR-1 by 11th, GSTR-3B by 20th of the following month. Composition scheme: CMP-08 quarterly by 18th, GSTR-4 by 30 June. Annual GSTR-9 by 31 December.
No – sweet shops selling through Swiggy, Zomato, or any e-commerce platform cannot opt for composition scheme. They must register under the regular scheme and report platform sales as exempt supplies under Section 9(5).
Bengali sweets like sandesh, mishti doi, and rasgulla attract 5% GST under HSN code 2106 (milk-based sweets). The rate is unchanged from before GST 2.0.
GST on sweet shop sales = 5% of taxable turnover. For example, if monthly sales are ₹10,00,000, GST = ₹50,000. Deduct eligible ITC (on raw materials and inputs) to arrive at net GST payable.
Plain paneer, dahi, and fresh milk are exempt (0% GST). However, processed cheese attracts 12% GST. Ensure HSN-wise billing for accurate classification.
Non-filing of GST returns attracts a late fee of ₹50 per day (₹25 CGST + ₹25 SGST) plus 18% interest per annum on unpaid tax. Continued non-compliance can lead to GSTIN cancellation, prosecution, and difficulty in obtaining business loans.