Last reviewed: 8 October 2026. The festive season is when many founders convert a home kitchen or a rented unit into a delivery-only brand. Orders start coming within days of listing on an app, but the paperwork that decides whether the business can run safely, and whether the GST position is clean, is often left for later. This note sets out the registrations a cloud kitchen needs, how the 2026 FSSAI turnover bands apply, who pays GST on app orders, and a first-week checklist.
What a cloud kitchen actually needs, in one table
| Requirement | Who it applies to | Practical point |
|---|---|---|
| FSSAI Registration or Licence | Every food business operator, including delivery-only kitchens | Category follows annual turnover and activity. Display the 14-digit number on invoices, packaging and app listings. |
| GST registration | When aggregate turnover crosses the threshold, or another section 24 trigger applies | Turnover includes aggregator, own-website, walk-in and catering sales taken together. |
| Shop and establishment registration | Commercial premises employing staff, as per the State law | Rules and fees differ by State. Confirm with the local labour or municipal office. |
| Fire and building-use clearance | Depends on building type, floor area and fuel | Ask the landlord and the local fire authority before fitting out. Commercial LPG in a residential building is a frequent problem. |
| Trade or health licence | Where the municipal body requires it | Varies by city. Not a central law. |
| Udyam registration | Optional but useful | Helps with MSME schemes and credit. It does not replace FSSAI or GST. |
FSSAI: which tier fits a cloud kitchen in 2026
The Food Safety and Standards (Licensing and Registration of Food Businesses) Amendment Regulations, 2026, gazetted on 10 March 2026 and effective from 1 April 2026, raised the turnover bands. We have covered the change in our note on the new FSSAI turnover limits. For a delivery-only kitchen the working position is:
| Annual turnover | Category | Indicative annual fee |
|---|---|---|
| Up to Rs 1.5 crore | Basic Registration | Rs 100 |
| Rs 1.5 crore to Rs 50 crore | State Licence | Rs 2,000 to Rs 5,000 |
| Above Rs 50 crore, or specified activities | Central Licence | Rs 7,500 |
Licences and registrations are now perpetual, but the annual fee must be paid on FoSCoS or the licence is treated as suspended. Please treat the fee amounts as indicative and confirm them on the portal when you apply. If you are unsure which tier applies, the registration, State or Central selector walks through the logic, and the FoSCoS step-by-step guide covers the application itself.
Three points are specific to cloud kitchens. First, the licence attaches to the premises, so each kitchen location needs its own. Second, if you run several delivery brands from one kitchen, confirm with the licensing authority how those brand names should be reflected, rather than assuming one licence covers any label. Third, hygiene obligations under Schedule 4 and the food safety supervisor requirement do not shrink because you have no dining area. Inspectors look at the kitchen, storage, pest control, water testing and staff hygiene exactly as they would for a restaurant. Our post-licence checklist for food businesses lists what to keep ready.
GST: who pays on app orders and who pays on everything else
For restaurant service supplied through an e-commerce operator, section 9(5) of the CGST Act makes the operator liable to pay the tax from 1 January 2022. CBIC Circular 167/23/2021-GST clarifies the working: the operator pays at 5% in cash, with no ITC used for this liability; the operator pays even where the restaurant is unregistered; and the operator no longer collects TCS or files GSTR-8 for these supplies. A restaurant's aggregate turnover for threshold purposes includes supplies made through operators.
| Sales channel | Who is liable to pay GST | What you do |
|---|---|---|
| Orders on a notified food delivery app | The app (section 9(5)) | Report as per the Circular: GSTR-1 Table 8 and GSTR-3B Table 3.1(c) if registered. Keep the app's monthly statements. |
| Own website, WhatsApp or phone orders | You, as the supplier of restaurant service | Issue your own invoice. Restaurant service is generally taxed at 5% without ITC; confirm the current rate entry before invoicing. |
| Corporate catering and bulk orders | You | Check whether the supply is restaurant service or outdoor catering, since the rate and ITC position can differ. |
| Packaged goods sold separately | You | Each product has its own rate. Do not apply 5% to everything. |
Worked example 1: which FSSAI tier and when does GST apply
A founder in Thane expects Rs 6 lakh of monthly sales from a single kitchen, so about Rs 72 lakh a year. That is below Rs 1.5 crore, so Basic Registration is the likely FSSAI category for the first year. Annual turnover of Rs 72 lakh is above the Rs 20 lakh registration threshold for service providers in a general-category State, so GST registration will be needed once the cumulative figure crosses the limit. The founder should plan registration within the first month or two, not at the end of the year.
Worked example 2: counting aggregator sales towards the threshold
A home chef has Rs 14 lakh of sales on a delivery app and Rs 8 lakh from direct orders in a year. She thinks she is below the Rs 20 lakh limit because the app pays the GST on its share. Under the Circular, aggregate turnover includes the app sales, so her figure is Rs 22 lakh, and registration is needed. Her direct orders then carry GST invoices from her own registration. Counting only direct sales is a common error.
First-week setup sequence
- Finalise the premises and get the landlord's written consent for commercial food use.
- Check fire, LPG and building-use norms with the local authority.
- Apply for FSSAI on FoSCoS and keep the application acknowledgement. Do not go live on apps without a number.
- Open a current account in the name of the entity, or the proprietor, and keep personal and business credits separate.
- Choose the entity form. A proprietorship is quick to start, but a private company or LLP helps if you plan outside funding or several kitchens.
- Apply for GST registration as soon as the threshold is in sight, or earlier if you plan inter-state or corporate business. The GST registration checklist lists the documents.
- Set up the books: outlet-wise sales by channel, payout reconciliation, purchases, wastage and staff costs.
- Calendar the FSSAI annual fee, GST returns and advance tax.
Common mistakes
| Mistake | Consequence | Fix |
|---|---|---|
| Listing on apps before FSSAI is issued | Delisting and exposure to penalty for operating without a licence | Wait for the number, even if the process takes days. |
| Ignoring aggregator sales for the GST threshold | Late registration, interest and penalty exposure | Track combined turnover monthly. |
| Not reconciling payouts | Unclaimed refunds, commission errors, wrong profit figures | Match each payout statement to bank credits and to order data. |
| Assuming one licence for all brands and locations | Compliance gap at inspection | One licence per premises; confirm brand treatment with the authority. |
| Mixing personal and business banking | Weak records for tax and loans | Keep a dedicated account from day one. |
Why the books matter more for delivery-only kitchens
A dine-in restaurant sees cash and card receipts at the counter. A cloud kitchen sees only the aggregator's net payout, after commission, ads, discounts and refunds. Without a monthly reconciliation you cannot tell whether the platform charged the agreed commission, whether cancelled orders were compensated, or what your real margin per order is. Monthly bookkeeping that ties sales by channel to bank credits is therefore a business control, not a tax formality.
Frequently asked questions
Does a cloud kitchen need an FSSAI licence if it sells only through Swiggy or Zomato?
Yes. Every food business operator needs its own FSSAI registration or licence, whatever the sales channel. Aggregators display your FSSAI number and expect it to be valid. At turnover up to Rs 1.5 crore the Basic Registration is generally the starting point under the 2026 thresholds, and a State Licence applies above that.
Who pays GST on orders taken through a food delivery app?
For restaurant service supplied through an e-commerce operator, section 9(5) of the CGST Act makes the operator liable to pay GST at 5% from 1 January 2022, in cash and not through ITC. This applies even where the restaurant is unregistered, as clarified in CBIC Circular 167/23/2021-GST.
Does my GST registration threshold include aggregator sales?
Yes. The Circular clarifies that a restaurant's aggregate turnover includes the value of supplies made through e-commerce operators, even though the operator pays the tax. Add aggregator, own-website, walk-in and catering sales together before testing the threshold.
Can one kitchen run several delivery brands on one FSSAI licence?
FSSAI licences attach to the premises and the kind of business, not to a brand name. Whether and how additional brand names are to be reflected should be confirmed on FoSCoS or with the licensing authority before listing brands on apps.
Is a fire NOC compulsory for every cloud kitchen?
Not in a uniform way. Fire and building-use requirements are set by the local fire authority and municipal body, and depend on the building type, floor area and fuel used. Check before signing the lease, because a commercial LPG set-up in a residential building is a common cause of closure.
What books should a cloud kitchen keep?
Keep an outlet-wise sales register by channel, aggregator payout statements reconciled to bank credits, purchase bills with GSTIN where available, wastage records and a monthly commission and discount schedule. These reconciliations catch most payout mismatches and support GST and income-tax returns.
We handle FSSAI applications, GST registration and monthly bookkeeping for small food businesses in Thane and across Maharashtra.
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This note is for general information and is not advice on any specific case. Rates, thresholds, fees and local requirements change, so please confirm the position on the date of your transaction. Prepared by CA Somesh Chandak & Associates, Thane.