Registrations Required for Small Business in India: GST, Udyam, Shop Act

Most small businesses in India start with a PAN, a bank account and, in most States, a shop or establishment registration. GST becomes compulsory above the turnover limit, or earlier if you sell across States or through most marketplaces. Udyam is optional and free. FSSAI and IEC apply only to food and to imports or exports.

Which registrations, side by side

GST: the one most sellers get wrong

Do you sell only in your own State, from a shop? Then GST registration is needed once your turnover for the year passes Rs 40 lakh if you sell only goods, or Rs 20 lakh if you provide services. Some States have lower limits. Turnover is counted across your whole PAN, exempt sales included.

Selling to another State, even once, or through Amazon, Flipkart or Meesho? The limit usually does not protect you. Section 24 of the CGST Act makes registration compulsory for inter-State sellers of goods and for people selling through a marketplace that collects tax at source. Since 1 October 2023, notification 34/2023-Central Tax lets a small seller of goods sell through marketplaces without GST, but only within one State, under the turnover limit, and with an enrolment number from the GST portal. The detail is in the GST registration limit and selling on Meesho without GST.

Udyam: free, and worth having for the right business

Udyam does not let you trade, and nobody fines you for not having it. What it gives a micro or small manufacturer or service provider is real: a buyer must pay within 45 days at most, and a buyer who pays late loses its tax deduction until it pays. A pure trader gets only priority sector lending from banks. Since 1 April 2025, micro means investment up to Rs 2.5 crore and turnover up to Rs 10 crore. See what Udyam registration gives you.

Shop Act and trade licence: the local ones

Every State has its own Shops and Establishments Act. Some ask only for an online intimation from a small shop, others for a full registration within a set time of opening, and some exempt the smallest units. Many cities also want a trade licence for certain trades. Banks often ask for one of these as proof of a business address when you open a current account. Check your State labour department's portal and your city corporation's site, because no single national rule exists.

FSSAI and IEC: only if they fit your trade

Selling packaged snacks, honey or spices, even online? You need FSSAI. The thresholds changed on 1 April 2026: registration up to Rs 1.5 crore turnover, a State licence above that up to Rs 50 crore, a central licence above Rs 50 crore. Many older pages still show Rs 12 lakh, so check the date on what you read.

Planning to import stock from China or ship goods abroad? You need an Import Export Code first. See what an IEC is and who needs one.

A worked example

Sana starts selling homemade pickles from Lucknow in July 2026. In year one she expects Rs 18,00,000 of sales: Rs 6,00,000 from a stall in her area and Rs 12,00,000 on Meesho and Amazon, with buyers all over India.

• PAN and bank account: she uses her own PAN and opens a current account.
• GST: her turnover is below Rs 40 lakh, but she ships to other States through marketplaces, so the enrolment route does not fit. She registers. Government fee: Rs 0.
• FSSAI: pickles are food. At Rs 18,00,000 she is far below Rs 1.5 crore, so basic registration is enough.
• Shop Act: she checks Uttar Pradesh's rules for her stall and her kitchen unit.
• Udyam: she makes the pickles, so she is a micro manufacturer. Registering is free and helps when a retail chain later buys from her on credit.
• IEC: not needed until she exports.

The mistake people usually make

They think one registration covers everything. A Udyam certificate is not a GST registration, and a GSTIN is not a food licence. The second mistake is paying an agent for the free ones. GST and Udyam cost nothing on the government portals. Pay for help only where the form is genuinely hard for you, or where a mistake costs more than the fee.

What to do today: list what you sell, where your buyers are and whether you handle food or imports. Then tick off the table above, starting with GST, because that is the one with penalties and interest if you are late.

Frequently asked questions

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