Looking for expert help with GST and income tax for pickle and papad makers India? 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
- Pickles are 5% GST from 22 September 2025, whichever heading (2001, 2005, 2008 or 2103) they fall under (Notification 9/2025-Central Tax (Rate), Schedule I).
- Papad is exempt (Notification 10/2025-Central Tax (Rate), S. No. 99). Extruded snack pellets (fryums) are 5%.
- Exempt papad sales still count in aggregate turnover. In Telangana you must register once pickles plus papad cross Rs 20 lakh.
- Composition manufacturers pay 1% on total turnover in the State, including exempt papad.
- Small makers can declare 6% or 8% of turnover as profit under Section 44AD for AY 2026-27 (Section 58 of the 2025 Act from FY 2026-27).
What is the GST rate on pickles and papad? Pickles are taxed at 5% GST (2.5% CGST plus 2.5% SGST) from 22 September 2025 under Schedule I of Notification 9/2025-Central Tax (Rate). Papad, by whatever name it's known, is fully exempt under S. No. 99 of Notification 10/2025-Central Tax (Rate). Fryums made by extrusion are 5%.
Most pickle businesses start in a home kitchen and grow through word of mouth, a few retail shops, and then Amazon or Instagram orders. Somewhere along that path the owner has to decide whether to register under Goods and Services Tax (GST), which scheme to choose, and how to file income tax on profits that came mostly through UPI. Papad makes it harder, because it's exempt while the pickle beside it on the shelf isn't. This guide is for home and small-unit makers of pickles, papad, chutney powders and similar products, and for the Chartered Accountants (CAs) who file for them. GST rates are as in force from 22 September 2025. Income tax is for FY 2025-26 (AY 2026-27) under the Income-tax Act 1961, with the 2025 Act section numbers that apply from 1 April 2026.
Which of your products are 5% and which are nil?
Nearly everything you make is 5%. Papad is the one big exception.
Comparison
GST on Pickles, Papad and Related Products from 22 September 2025
| Product (HSN) | GST | Notification entry |
|---|---|---|
| Pickles preserved in vinegar (2001) | 5% | 9/2025-CT(R), Schedule I, S. No. 125 |
| Vegetables preserved otherwise than by vinegar, not frozen (2005) | 5% | 9/2025-CT(R), Schedule I, S. No. 129 |
| Fruit and other plant parts otherwise prepared or preserved (2008) | 5% | 9/2025-CT(R), Schedule I, S. No. 132 |
| Mixed condiments, curry paste, sauces (2103) | 5% | 9/2025-CT(R), Schedule I, S. No. 139 |
| Chutney powder, bari of pulses including mungodi (2106) | 5% | 9/2025-CT(R), Schedule I, S. No. 142 |
| Un-fried snack pellets made by extrusion, such as fryums (1905) | 5% | 9/2025-CT(R), Schedule I, S. No. 123 |
| Pappad, by whatever name it is known (1905) | Nil | 10/2025-CT(R), S. No. 99 |
Source: Notifications 9/2025-Central Tax (Rate) and 10/2025-Central Tax (Rate), both dated 17 September 2025, in force from 22 September 2025. IGST rates under the matching Integrated Tax (Rate) notifications.
Which HSN for your pickle? It depends on the recipe. Mango in oil, lemon in brine and mixed vegetable in vinegar can fall under different headings. Because every heading a pickle can sit in is at 5%, a classification slip won't change your tax. It will still put the wrong HSN on your invoices and in GSTR-1, so settle it once with your CA and use it consistently.
Papad vs fryums. The exemption covers "pappad, by whatever name it is known". Un-fried snack pellets made through extrusion are a separate, 5% entry. If your product is extruded and sold for frying at home, don't assume the papad exemption covers it. Get a written view first.
Do papad sales count toward the GST registration limit?
Yes, and this catches many makers. Section 22(1) of the Central Goods and Services Tax (CGST) Act looks at aggregate turnover, and Section 2(6) includes exempt supplies in it. Your papad sales push you toward the limit even though no GST is charged on them.
What is your limit? Section 22(1) sets Rs 20 lakh. Notification 10/2019-Central Tax raises it to Rs 40 lakh for suppliers of goods only, but ten States and Union Territories are left out, including Telangana. So a Hyderabad maker has a Rs 20 lakh limit. Our GST registration limit guide lists each State.
Example (Hyderabad, FY 2025-26): you sell Rs 12 lakh of pickles and Rs 9 lakh of papad, all within Telangana. Aggregate turnover is Rs 21 lakh. That's above Rs 20 lakh, so you must register, even though your taxable sales are only Rs 12 lakh. Had you sold papad alone, Section 23(1)(a) would keep you out of registration at any turnover.
Once registered, you issue a tax invoice for pickles and a bill of supply for papad (Section 31(3)(c)). You can't claim input tax credit on purchases used for papad. Where an input such as oil, spices or packing film goes into both products, Section 17(2) limits your credit to the share used for pickles. Our team handles GST registration for food makers from application to the first return.
Selling pickles on Amazon, Flipkart or Meesho
Section 24(ix) normally requires anyone selling through an e-commerce operator that collects tax at source to register, whatever their turnover. Since 1 October 2023 there's a way around it for small sellers of goods.
Step-by-Step Guide
Selling Online Without GST Registration (Notification 34/2023-Central Tax)
All conditions must hold. Break one and you need full registration.
Stay within the turnover limit
Aggregate turnover in the previous and the current year must not exceed your State's registration limit.
Sell only inside your State
No inter-State sales at all, and supplies through e-commerce operators in only one State.
Declare your PAN on the GST portal
Give your PAN, business address and the State you'll sell in. The portal validates the PAN.
Get an enrolment number
You can't make any online sale until it's granted. Only one enrolment number per State.
Switch when you register
If you later take GST registration, the enrolment number stops being valid from that date.
Source: Notification 34/2023-Central Tax dated 31 July 2023, in force from 1 October 2023
The catch is the "inside your State" rule. Most marketplace listings ship pan-India by default. One order to a buyer in another State is an inter-State taxable supply, and Section 24(i) then makes registration compulsory. If you want to sell nationally, register first. Our e-commerce operator TCS guide explains what the marketplace deducts and how to claim it.
Should a small pickle maker opt for composition?
Composition is open to a manufacturer whose aggregate turnover in the previous year was up to Rs 1.5 crore (Notification 14/2019-Central Tax). Pickles and papad aren't on its excluded list, which names only ice cream, pan masala and tobacco. From 1 October 2023, composition sellers can sell goods through e-commerce operators too, but only within the State; the operator must block inter-State orders (Notification 36/2023-Central Tax).
There's a trap for papad makers. Rule 7 of the CGST Rules charges a composition manufacturer 0.5% CGST plus 0.5% SGST on its "turnover in the State". Section 2(112) includes exempt supplies in that figure. A composition trader pays only on taxable supplies. So as a manufacturer, you pay 1% on papad that would be tax-free under the regular scheme.
Comparison
Regular vs Composition: Rs 60 Lakh Pickles + Rs 20 Lakh Papad (all within the State)
| Regular scheme | Composition | |
|---|---|---|
| GST charged to buyers on pickles | Rs 3,00,000 (5% of Rs 60 lakh) | Nil, can't charge (Section 10(4)) |
| GST on papad | Nil | Rs 20,000 (1% of Rs 20 lakh) |
| GST on pickles payable to government | Rs 3,00,000 less credit | Rs 60,000 (1% of Rs 60 lakh) |
| Credit on inputs used for pickles (assumed) | Rs 1,00,000 claimed | Rs 1,00,000 lost, becomes cost |
| Net cash paid as GST | Rs 2,00,000, collected from buyers | Rs 80,000, from your own margin |
| Total GST cost borne by you | Nil | Rs 1,80,000 (Rs 80,000 + Rs 1,00,000) |
Source: Rule 7, CGST Rules 2017; Sections 2(112) and 10(4), CGST Act 2017; rates from Notification 9/2025-Central Tax (Rate). Input credit figure is an assumption for illustration.
Composition works when your buyers are households paying the shelf price, and your input credit is small. It works badly when you sell to shops and distributors who are registered, because they can't claim credit on your bill of supply and will prefer a regular-scheme supplier. Our composition scheme guide covers the filing calendar.
Income tax on a pickle business: Section 44AD and audit
Your profit is business income under "Profits and gains of business or profession". If you run the business from home, keep a separate bank account and UPI ID for it; mixing kitchen and household spending makes both GST and income tax harder to support.
Presumptive tax suits most home makers. Section 44AD of the 1961 Act covers resident individuals, Hindu Undivided Families (HUFs) and partnership firms (not LLPs) with turnover up to Rs 2 crore, or Rs 3 crore if cash receipts don't exceed 5% of turnover. Deemed profit is 6% of turnover received through banking or electronic modes and 8% of the rest. UPI, cards, net banking, IMPS, NEFT and RTGS all count as electronic modes under Rule 6ABBA of the Income-tax Rules 1962.
Example (FY 2025-26): turnover Rs 30,00,000, of which Rs 24,00,000 came by UPI and bank transfer and Rs 6,00,000 in cash.
- 6% of Rs 24,00,000 = Rs 1,44,000
- 8% of Rs 6,00,000 = Rs 48,000
- Presumptive profit = Rs 1,92,000
Cash is 20% of turnover, so the Rs 3 crore limit isn't available, but at Rs 30 lakh you're well within Rs 2 crore. You can declare a higher profit if your books show one. Be careful about dropping the scheme once you've used it. If you don't declare profit under 44AD in any of the next five years, Section 44AD(4) bars you from it for the five years after that. During those years, if your income is above the basic exemption limit, Section 44AD(5) requires you to keep books and get a tax audit. Our Section 44AD guide has more detail.
Tax audit. Outside 44AD, a business with turnover above Rs 1 crore needs an audit under Section 44AB(a). The limit rises to Rs 10 crore only if cash receipts and cash payments are each within 5% of the totals.
Missed the AY 2026-27 return? The 31 July 2026 due date for non-audit cases has passed. A belated return can still be filed up to 31 December 2026 (Section 139(4), three months before the end of the assessment year), with a late fee of Rs 5,000, capped at Rs 1,000 if total income is up to Rs 5 lakh (Section 234F). Our ITR filing service can file it for you.
From FY 2026-27, the Income-tax Act 2025 applies. Presumptive tax moves to Section 58 (Table, S. No. 1) and tax audit to Section 63 (Table, S. No. 1), with the same rupee limits and percentages.
Common mistakes pickle and papad makers make
- Leaving papad out of turnover. It's exempt, but it counts toward the registration limit. Many makers register late because they only added up pickle sales.
- Opting for composition without checking the papad cost. As a manufacturer you pay 1% on exempt papad too. If papad is a big share of sales, run the numbers first.
- Listing pan-India on a marketplace without registration. The enrolment route under Notification 34/2023 is for sales inside one State only. One out-of-State order breaks it.
- Claiming full credit on shared inputs. Oil, spices and packing used for both papad and pickles need a split under Section 17(2).
For the food-licence side of the business, see our FSSAI registration guide. If you also make sweets or namkeen, the sweet shop GST guide covers those rates, and the spice and masala traders guide covers ground spices.
How Tax Garden helps
We register pickle and papad makers under GST, set up separate invoice and bill-of-supply series, and file GSTR-1 and GSTR-3B with exempt and taxable sales reported correctly. Before you choose composition, we work out the 1% cost on your papad sales against the credit you'd give up. Message us on WhatsApp at 9640290977 or start with our GST registration service.
