Looking for expert help with GST and income tax for meat shop owners? The team at Tax Garden, based in Kondapur, Hyderabad, helps Indian SMEs stay compliant. End-to-end filings, notices, and deadline tracking, all in one place.
Key Takeaways
- Fresh or chilled chicken, mutton, pork and offal carry no GST, packed or loose (Notification 10/2025-Central Tax (Rate), S. No. 7 and 8).
- Frozen meat is exempt too, unless it's pre-packaged and labelled. Then it's 5% (Notification 9/2025-Central Tax (Rate), Schedule I, S. No. 2).
- Live poultry and eggs in shell are exempt. Nuggets, sausages and other prepared meat are 5%.
- A shop selling only exempt items doesn't need GST registration. Add one taxable line and your exempt sales count toward the threshold.
- Under Section 44AD, deemed profit is 6% of digital receipts and 8% of cash, so moving sales to UPI lowers the figure.
Is there GST on chicken and mutton? Fresh or chilled chicken, mutton, pork and edible offal are exempt from GST under S. No. 8 of Notification 10/2025-Central Tax (Rate), in force from 22 September 2025. Frozen meat is also exempt unless it's pre-packaged and labelled, in which case it attracts 5% under Schedule I of Notification 9/2025-Central Tax (Rate).
Most chicken and mutton shops never charge a rupee of Goods and Services Tax (GST), and many don't need to register at all. The trouble starts when the freezer fills up. A pack of branded frozen nuggets or labelled frozen chicken is a taxable 5% item, and one taxable line changes how your registration threshold is worked out. This guide covers what's exempt and what's taxed, when you need to register, and how your income tax is worked out for FY 2025-26 (AY 2026-27) under the Income-tax Act 1961.
Which items carry GST and which don't?
The rule turns on two questions: is it fresh or chilled, and is it pre-packaged and labelled? "Pre-packaged and labelled" means a retail pack of up to 25 kg that must carry declarations under the Legal Metrology Act 2009 (Explanation to Notification 10/2025-Central Tax (Rate)). Meat you cut and weigh in front of the customer isn't pre-packaged.
Comparison
GST on Meat Shop Items (from 22 September 2025)
| Item | HSN | GST |
|---|---|---|
| Live poultry (fowls, ducks, geese, turkeys, guinea fowls) | 0105 | Exempt |
| Live sheep and goats | 0104 | Exempt |
| Chicken, mutton, pork, offal: fresh or chilled, packed or loose | 0203 to 0209 | Exempt |
| Bovine meat, fresh or chilled | 0201 | Exempt |
| Meat, frozen or salted, dried or smoked, not pre-packaged and labelled | 0202 to 0210 | Exempt |
| Meat, frozen or salted, dried or smoked, pre-packaged and labelled | 0202 to 0210 | 5% |
| Eggs in shell, fresh, preserved or cooked | 0407 | Exempt |
| Eggs not in shell, egg yolks (liquid, powder, frozen) | 0408 | 5% |
| Sausages and similar meat products | 1601 | 5% |
| Other prepared or preserved meat (nuggets, ready-to-cook products) | 1602 | 5% |
| Fish, fresh or chilled | 0302 | Exempt |
| Fish, frozen, pre-packaged and labelled | 0303 to 0309 | 5% |
Source: Notification 10/2025-Central Tax (Rate), S. No. 4, 5, 7, 8, 9, 12, 14 and 18; Notification 9/2025-Central Tax (Rate), Schedule I, S. No. 2, 3, 9, 100 and 101
Look at the gap between the fresh and frozen entries. Fresh or chilled meat is exempt even in a sealed, labelled tray. Frozen meat is exempt only when it's not pre-packaged and labelled. So a labelled tray of chilled chicken from your fridge is exempt, while the same chicken frozen in a labelled pack from a brand is 5%.
Marinated chicken sits on the line. Raw meat with a spice coating may be treated as prepared meat under heading 1602 instead of fresh meat under Chapter 2. If you sell marinated or ready-to-cook cuts, confirm the classification before you decide they're exempt.
If you also serve fried or tandoori chicken to eat at your counter, that's a restaurant service, taxed separately from the goods above. See our income tax and GST guide for restaurant and cafe owners.
Do you need GST registration?
If every item you sell is exempt, you don't need to register, whatever your turnover (Section 23(1)(a), CGST Act). A shop selling only fresh chicken, fresh mutton and eggs in shell can run without a GST number.
Once you add a taxable item, the threshold test counts aggregate turnover, and that includes exempt sales (Section 2(6), CGST Act). For goods, the threshold is Rs 40 lakh in most states. Telangana and several other states kept the Rs 20 lakh limit (Notification 10/2019-Central Tax).
Say a Hyderabad shop sells Rs 30 lakh of fresh chicken and mutton a year and starts stocking branded frozen nuggets worth Rs 2 lakh. Taxable sales are only Rs 2 lakh, but aggregate turnover is Rs 32 lakh, above Rs 20 lakh. The shop must register. GST is still charged only on the nuggets; the fresh meat stays exempt on the bill.
Step-by-Step Guide
Does Your Meat Shop Need a GST Number?
List everything you sell
Fresh meat, live birds, eggs in shell, frozen packs, nuggets, sausages, marinades.
Is every item exempt?
If yes, you're not liable to register (Section 23(1)(a), CGST Act). Stop here.
If any item is taxable, add up all sales
Aggregate turnover includes exempt sales (Section 2(6), CGST Act).
Compare with your state's limit
Rs 20 lakh in Telangana and some other states, Rs 40 lakh in most others (Notification 10/2019-Central Tax).
Selling taxable goods to another state?
That needs registration from the first rupee (Section 24(i), CGST Act).
Source: Sections 2(6), 22, 23 and 24, CGST Act 2017; Notification 10/2019-Central Tax
Our GST registration service can check this for your shop and register you if needed. More detail is in our GST registration threshold guide.
Once registered: regular scheme or composition?
A registered meat shop mostly makes exempt sales, so it can't claim input tax credit (ITC) on anything used for them (Section 17(2), CGST Act). Credit on common costs like shop rent is split between taxable and exempt sales under Rule 42 of the CGST Rules. For a shop where 90% or more of sales are fresh meat, most of that credit goes.
Under the composition scheme, a trader pays 1% on the turnover of taxable supplies only (Rule 7, CGST Rules), so fresh meat sales carry no composition tax. The eligibility limit is Rs 1.5 crore of aggregate turnover. You can't collect GST on your bill, can't claim ITC and can't sell to other states (Section 10(2)(c), CGST Act).
Take the Rs 2 lakh of frozen nuggets, bought for Rs 1,60,000 plus Rs 8,000 GST and sold at Rs 2,00,000 at printed prices.
- Regular scheme: GST inside the price is Rs 9,524 (2,00,000 x 5/105). After Rs 8,000 of ITC you pay Rs 1,524 and keep Rs 30,476.
- Composition: you pay Rs 2,000 (1% of Rs 2,00,000). The Rs 8,000 GST on purchase becomes a cost, so you keep Rs 30,000.
The regular scheme leaves Rs 476 more a year here. Composition is simpler: a quarterly CMP-08 and an annual GSTR-4, instead of GSTR-1 and GSTR-3B for every period. On numbers this close, many small shops choose the lighter filing. See our composition scheme guide for the full conditions.
How is your income taxed for AY 2026-27?
Section 44AD lets a resident individual, HUF or partnership firm (not an LLP) declare a deemed profit instead of keeping full books. The limit is Rs 2 crore of turnover, or Rs 3 crore where cash receipts are within 5% of total receipts. The deemed profit is 6% of receipts by UPI, card or bank and 8% of cash receipts. You can declare more than this.
Example 1 (Rs 80 lakh turnover, new regime): Rs 50 lakh comes by UPI, Rs 30 lakh in cash.
- Deemed profit: 6% of Rs 50 lakh (Rs 3,00,000) plus 8% of Rs 30 lakh (Rs 2,40,000), so Rs 5,40,000.
- Tax: 5% of Rs 1,40,000 above Rs 4 lakh, so Rs 7,000. The Section 87A rebate covers income up to Rs 12 lakh, so tax payable is nil, assuming no other income.
Example 2 (Rs 1.6 crore turnover, two outlets, new regime): Rs 1.3 crore by UPI and card, Rs 30 lakh in cash.
- Deemed profit: 6% of Rs 1.3 crore (Rs 7,80,000) plus 8% of Rs 30 lakh (Rs 2,40,000), so Rs 10,20,000.
- Tax: Rs 20,000 on Rs 4 to 8 lakh, plus 10% of Rs 2,20,000 (Rs 22,000), so Rs 42,000. Income is within Rs 12 lakh, so the 87A rebate brings it to nil.
- If Rs 20 lakh of that cash had come by UPI instead, the deemed profit would fall by Rs 40,000 (2% of Rs 20 lakh).
Example 3 (Rs 2.2 crore turnover, wholesale to hotels): Rs 22 lakh in cash, which is 10% of receipts. Turnover is above Rs 2 crore and cash is above 5%, so Section 44AD isn't available. The shop must keep books (Section 44AA) and get a tax audit, since turnover exceeds Rs 1 crore and the 5% cash condition for the higher Rs 10 crore limit isn't met (Section 44AB(a)). For AY 2026-27 the audit report is due by 30 September 2026, one month before the 31 October return due date for audited taxpayers.
Chicken margins are thin, so an 8% deemed profit can be more than you actually earn in a slow year. Declaring below the Section 44AD figure has consequences, so check these first.
Step-by-Step Guide
Before You Declare Less Than the Section 44AD Figure
Check the last five years
If you declared under Section 44AD in any of them, going below it now bars you from Section 44AD for the next five assessment years (Section 44AD(4)).
Check the audit trigger
Under that bar, if your income is above the basic exemption limit you must keep books and get a tax audit (Sections 44AD(5) and 44AB(e)).
Make sure the books support the figure
Your bank statements and any GST returns show your sales. A declared profit well below what they imply has to be backed by proper accounts.
File the right form
ITR-4 for Section 44AD if total income is within Rs 50 lakh and other conditions are met; ITR-3 if you file on books.
Source: Sections 44AA, 44AB, 44AD and 87A, Income-tax Act 1961; Finance Act 2025
If you missed the due date for AY 2026-27, you can still file a belated return until 31 December 2026 (Section 139(4)). The late fee is Rs 5,000, or Rs 1,000 if total income is within Rs 5 lakh (Section 234F). From FY 2026-27 the Income-tax Act 2025 applies, with new section numbers. See our Section 44AD guide and old vs new regime guide.
Common mistakes meat shops make
- Registering when you don't need to. A shop selling only fresh meat, live birds and eggs in shell isn't liable to register. Once registered, you have returns to file even with zero tax.
- Leaving exempt sales out of the threshold. Once you stock a taxable item, fresh meat sales count toward aggregate turnover.
- Treating all frozen stock as 5%. Only frozen meat that is pre-packaged and labelled is taxable. Frozen meat you sell loose by weight is exempt.
- Billing nuggets and sausages as exempt. Prepared meat products under headings 1601 and 1602 are 5%.
- Claiming full ITC on rent. Credit linked to exempt sales has to be reversed under Rule 42.
How Tax Garden helps meat and chicken shops
We check whether your shop needs a GST number at all, and if it does, we set up exempt and 5% items correctly and file your returns. See our GST return filing service. We also prepare your ITR on Section 44AD or books and handle the tax audit where it applies; see our ITR filing service and pricing. For fish sellers and farmers, see our income tax guide for fish farming and aquaculture owners.
