I want to start gruh udyog from my house

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 August 2014 dear sir
plz guide me my self mr bharat dorik from ankleshwar want to start my gruh udyog from my house for papad making and potato chip any registration is req. or not and the incom genrate from this business will be taxable in my wife name

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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28 July 2024 Starting a "Gruh Udyog" (home-based industry) like papad making and potato chips production in Ankleshwar, Gujarat involves several steps, including legal compliance, registration, and understanding tax implications. Here’s a detailed guide to help you get started:

### **1. **Understanding Gruh Udyog**

A "Gruh Udyog" is essentially a small-scale, home-based business that can be registered under various schemes to take advantage of government benefits. For food production, this includes making items like papads and potato chips.

### **2. **Registration and Licensing**

**2.1 **Business Registration**

- **Register Your Business**: While Gruh Udyog is often small-scale, it's essential to register it for legitimacy and to access government schemes. You can register as:
- **Sole Proprietorship**: The simplest form of business registration.
- **Partnership**: If more than one person is involved.
- **Limited Liability Partnership (LLP)**: If you want to limit liability.

**2.2 **Food License**

- **Food Safety and Standards Authority of India (FSSAI)**: Obtain an FSSAI license from the Food Safety Department. This is mandatory for any food-related business, including home-based food production.
- **Apply Online**: Visit the FSSAI website and apply for a food license.
- **Documents Required**: Proof of address, proof of identity, food safety management plan, etc.

**2.3 **Micro, Small, and Medium Enterprises (MSME) Registration**

- **MSME Registration**: Register your business under the MSME Act to avail of various benefits and subsidies. This registration is not mandatory but is beneficial for accessing financial aids and subsidies.
- **Apply Online**: Visit the Udyam Registration portal (previously Udyog Aadhar) and fill out the application form.

**2.4 **Trade License**

- **Local Municipal Corporation**: Obtain a trade license from the local municipal authority if required. This is necessary to ensure that your business complies with local regulations.

### **3. **Compliance and Health Safety**

**3.1 **Health and Hygiene Standards**

- **Food Safety**: Ensure compliance with health and hygiene standards as per FSSAI guidelines.
- **Sanitary Conditions**: Maintain cleanliness and safety standards in the production area.

**3.2 **Quality Certifications**

- **ISO Certification**: Though not mandatory, getting ISO certification can enhance your product's credibility.

### **4. **Taxation**

**4.1 **Income Tax**

- **Taxable Income**: Income generated from the Gruh Udyog is taxable. As the business is run from home and if it’s in your wife’s name, the income will be considered under her income tax return.
- **Tax Filing**: Ensure to maintain proper records of all transactions, expenses, and income. File income tax returns for your wife, reporting the income from the business.

**4.2 **GST Registration**

- **GST**: If your annual turnover exceeds ₹40 lakh (₹20 lakh for special category states), you must obtain GST registration. This is crucial for compliance if you are selling goods.
- **Apply Online**: Register on the GST portal.

### **5. **Setting Up the Business**

**5.1 **Equipment and Supplies**

- **Equipment**: Invest in necessary equipment for papad and potato chips production.
- **Raw Materials**: Source quality raw materials and ensure proper storage.

**5.2 **Packaging and Labeling**

- **Packaging**: Use food-grade packaging materials.
- **Labeling**: Ensure that labels conform to FSSAI guidelines, including ingredient lists, expiry dates, and nutritional information.

**5.3 **Marketing and Distribution**

- **Marketing**: Develop a marketing strategy to promote your products.
- **Distribution**: Set up channels for distribution, including local markets and online platforms if applicable.

### **6. **Financial Planning and Management**

**6.1 **Funding**

- **Initial Investment**: Determine the initial investment required and plan your finances accordingly.
- **Loans and Grants**: Explore government schemes for small businesses or loans from financial institutions.

**6.2 **Accounting**

- **Bookkeeping**: Maintain accurate records of income, expenses, and other financial transactions.
- **Accounting Software**: Use accounting software for better management of finances.

### **7. **Additional Considerations**

**7.1 **Local Regulations**

- **Building Regulations**: Check with local authorities regarding any regulations about running a business from home.

**7.2 **Insurance**

- **Business Insurance**: Consider getting insurance for your business to cover potential risks.

**7.3 **Training**

- **Skill Development**: Consider attending workshops or training sessions related to food production and safety.

### **Summary**

1. **Register Your Business**: Choose between sole proprietorship, partnership, or LLP. Obtain a food license from FSSAI and consider MSME registration.
2. **Ensure Compliance**: Maintain health and hygiene standards, and comply with local regulations.
3. **Taxation**: Income from the business will be taxed under your wife’s name, and GST registration is required if turnover exceeds thresholds.
4. **Set Up and Manage**: Invest in equipment, source raw materials, and develop a marketing strategy.

By following these guidelines, you can establish and run a successful Gruh Udyog for papad and potato chips from your home in Ankleshwar.