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A grocery store is a simple business model to understand, yet it can be quite profitable. This is because the grocery store business is a utility business. It provides a fundamental and essential service that every human being needs - food! In this blog post, we shall discuss the licenses and certificates required to start a grocery store in India.
To start a grocery store in India, you need to obtain specific licenses, registrations and certificates to operate your business smoothly and in a legal manner. Some of the most essential licenses, registrations and certificates required for a grocery store are provided below:
Although starting a grocery store does not mandatorily require business registration, getting your business registered gives your business a formal structure. The benefit of a formal business structure is that it makes the business more credible and allows you (owner) to access loans, open current bank accounts and expand your business in future. For instance, if you want to expand your business by opening more branches of your grocery store in future, then business registration is quite essential.
However, like we mentioned, business registration isn’t a mandatory requirement. You can go for a sole proprietorship business model if you want to start your grocery shop alone. It doesn’t require registration and is the simplest form of business structure. For a small grocery store like a kiryana shop, sole proprietorship is suitable.
However, if you want to start your business with a partner without registering your business, you can choose partnership firm. This firm doesn’t have mandatory registration requirement either.
FSSAI License is a mandatory requirement for a grocery store since such a store deals with sale, storage and distribution of food products. Securing this license ensures compliance with regulations of Food Safety and Standards Authority of India and ensures that the food products that are sold at the grocery store are hygienic and safe for consumption by people.
There are three different kinds of FSSAI licenses based on the business's turnover and scale i.e., FSSAI basic license, FSSAI state license and FSSAI central license. For grocery store business with turnover up to Rs. 12 lakhs, basic license is required.
For grocery business with turnover between Rs. 12 lakhs and Rs. 20 crores operating within a single state, the state license is required. Central License must be obtained by a grocery business with turnover more than Rs. 20 crores or involved in import/export or multi-state operations.
GST registration is a mandatory registration for businesses if their annual turnover exceeds a certain threshold. If your grocery store’s business annual turnover exceeds Rs. 40 lakhs for goods (or Rs. 20 lakhs for goods for special category states), you are required to register your business under the GST system.
If your annual turnover does not exceed the threshold, GST registration is voluntary but it is still recommended. It can help your business to build trust with your customers, wholesalers and distributors.
A grocery store is a commercial establishment and is engaged in selling food products and services to customers for the purpose of profit. Therefore, such a store mandatorily needs to secure a shop and establishment certificate. Without this certificate, you cannot operate a grocery store legally.
By securing the shop and establishment certificate, your grocery store will ensure compliance with the labor law of your state/union territory. Additionally, this certificate also serves as your business’ legal existence. Generally, the shop and establishment certificate must be obtained within 30 days of commencing business.
A grocery business is a business that deals in sale of food products. Therefore, it is essential for such a business to obtain a trade license. The municipal corporation is responsible for issuing the trade license.
This license allows you to carry out your business activities at a specific location. It ensures that your business does not create health hazards, nuisance to community or any safety risks to public.
PAN means Permanent Account Number. It is a unique identification number issued by income tax department. For filing tax returns, opening a current bank account and conducting financial transactions, it is important to secure PAN.
You can use individual PAN in case of sole proprietorship business or unregistered partnership model. However, in the case of registered partnership firm, limited liability partnership or company, you will require separate business PAN.
To start and operate a grocery store in India, you require various licenses, registrations and certificates incl. these: Business registration certificate, FSSAI license, GST registration, shop and establishment certificate, trade license and PAN. You might require additional licenses/certificates/registrations depending on state/UT where your grocery store is located. For assistance in setting up a grocery store, you can connect with Registrationwala expert team. We’ll guide you on how you can secure all the necessary approvals.
Q1. Which authority issues trade license in Delhi?
A. The Municipal Corporation of Delhi, abbreviated as MCD, is the concerned authority for issuing trade license in Delhi.
Q2. Which form do I need to file for FSSAI license application?
A. For getting a basic license, you need to file Form A for FSSAI license application. For getting a state or central license, you need to file Form A.
Q3. Do I need business PAN if I run my grocery store under sole proprietorship model?
A. No, you do not need business PAN if you run your grocery business under sole proprietorship model. In this case, only the individual PAN is required because the business and the proprietor are legally considered the same entity.
Q4. When should the shop and establishment license be obtained?
A. Generally, it should be obtained within 30 days of commencement of business operations.
Q5. How to open kiryana shop?
A. To open kiryana shop, you need to secure all the essential licenses, registrations and certificates such as FSSAI license, GST registration, shop and establishment certificate, trade license, PAN, etc.
Q6. Is FSSAI license required for operating a grocery business?
A. Yes, FSSAI license is required for operating a grocery business. This is because a grocery business stores, handles and sells food items, and is considered a food business operator.
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