GST for a Bengaluru home bakery: the registration threshold, HSN codes, and what belongs on the invoice

A home bakery in Bengaluru clearing three lakh rupees a year from Instagram orders does not need a GST number yet. One clearing forty-five lakh from a mix of custom cakes and a standing wholesale account with a cafe almost certainly does, and the number that decides it is not the one most home bakers check first. Karnataka is a normal category state, so the registration threshold for a business that manufactures and sells goods sits at forty lakh rupees a year, not the twenty lakh figure that applies to services. A bakery selling what it bakes is a goods business under that rule, and that single distinction changes when the paperwork starts, sometimes by years.

The threshold most home bakers check wrong

Two conditions have to hold before the higher forty lakh limit applies: the business cannot be selling an excluded category such as ice cream, pan masala or tobacco, and the state has to have opted into the raised threshold. Karnataka has, which is why a Bengaluru bakery follows the forty lakh figure rather than the twenty lakh one written for services. Tally Solutions' guide to GST registration thresholds sets out both figures and the conditions attached to each, current as of 2026. The distinction gets messier for a bakery that also teaches paid workshops alongside selling cakes. That combination counts as a mixed supplier, and a mixed supplier follows the lower threshold that applies to its combined turnover, not the higher one written for goods alone, so a baker running both a kitchen and a weekend class should track the two revenue streams together, not separately.

Composition scheme is the other option worth knowing about before registering the standard way. A goods business under one and a half crore in turnover can opt into it and pay a flat rate instead of standard GST, giving up the right to claim input tax credit and to sell across state lines while enrolled. For a bakery selling directly to Bengaluru customers with modest ingredient costs, that trade often favours the flat rate. For one buying couverture, specialty flour and imported butter that already carries its own GST charge, the input credit given up under composition scheme is frequently worth more than the simpler bill it replaces, which is the calculation worth doing before choosing either path.

What the September 2025 rate cut changed

Cakes, pastries and biscuits got cheaper to sell from 22 September 2025, when the GST rate on most bakers' wares under heading 1905 dropped from 18 percent to 5 percent. The Central Board of Indirect Taxes and Customs made the change in Notification No. 9/2025-Central Tax (Rate), dated 17 September 2025, following that month's GST Council meeting. A2Z Taxcorp's coverage of the CBIC notification lists the specific rate movements by category, including savoury baked snacks, yeast and baking powder, which moved from 12 percent down to 5 percent in the same notification. Bread itself stays outside GST altogether, at nil, and has for years; the change landed on everything baked around it rather than on bread itself.

The HSN code on your own invoice

Heading 1905 covers bread, pastry, cakes and biscuits, and it narrows from there in a way that matters for pricing, not just paperwork. Plain bread stays nil-rated, rusks and toasted bread sit under sub-heading 1905 40 00 at 5 percent, and a richer biscuit with chocolate or a cream filling can carry a different rate than a plain one baked in the same kitchen the same morning. Masters India's breakdown of GST on bakery products walks through which sub-heading applies to which product, and getting it wrong is the kind of error a wholesale buyer's accountant catches before the seller does, usually by rejecting the invoice rather than flagging the mistake politely. A bakery under one and a half crore in annual turnover is not required to print the HSN code on an invoice at all, though most accountants recommend adding it earlier anyway, the moment a bakery starts supplying cafes or hotels that reconcile input credit against it.

What has to be on the invoice regardless of size

Once registered, Rule 46 of the CGST Rules sets what a valid invoice needs: the seller's name, address and GSTIN, a sequential invoice number reset each financial year, the date, the buyer's details, a description of what was sold, the taxable value, and the tax amount split by CGST and SGST. IndiaFilings' guide to GST invoice rules lists the sixteen fields Rule 46 requires and notes which ones trip up a first-time filer most often, the sequential numbering rule chief among them, since a gap or a repeat in the sequence is exactly what a GST audit checks first. Missing a required field does not just look sloppy. It can block the buyer's own input tax credit claim, and a cafe that cannot claim credit on the cakes it bought will ask for a corrected invoice before it pays, or quietly move its standing order to a supplier who gets the paperwork right the first time.

Where this sits in the training, not just the paperwork

None of this is technique, which is why it gets skipped in kitchen-only courses. Doodles Baking Institute's food entrepreneurship module, taught alongside patisserie and cake artistry in the longer diploma tracks, exists because a baker who can temper couverture perfectly but cannot read a GST invoice ends up handing that decision to whoever is willing to make it for them, usually a wholesale buyer with more leverage than the baker has. The licensing side of the same problem, getting an FSSAI licence sorted before the first bulk order lands, is worth doing at the same time as the GST registration, not after.

Frequently asked questions

Does a home bakery in Bengaluru need GST registration?

Only once annual turnover crosses the threshold: forty lakh rupees for a bakery selling only goods it makes, or twenty lakh if it also earns from services such as paid workshops. Below that, registration stays optional, though some wholesale buyers ask for a GSTIN before placing a recurring order regardless of the legal threshold.

What GST rate applies to cakes and pastries as of late 2026?

Five percent under HSN 1905, down from 18 percent since the CBIC notification took effect on 22 September 2025. Plain bread stays nil-rated. A richer product with chocolate or cream filling can fall under a different sub-heading, so check the specific HSN code rather than assuming every baked item carries the same rate.

Does every invoice need to show the HSN code?

Not below one and a half crore in annual turnover; GST rules exempt smaller businesses from listing it. Above that threshold it becomes mandatory, and most accountants recommend adding it earlier anyway, once a bakery starts billing businesses that claim input tax credit on the purchase.

What happens if an invoice is missing a required field?

It can be rejected for the buyer's own tax filing, which blocks their input credit claim and usually comes back to the seller as a request to reissue it. Rule 46 lists sixteen required fields; the sequential invoice number and, once turnover crosses the threshold, the HSN code are the two bakers skip most often.