How to register a Supermarket in Chennai?

The supermarket business is considered a stable income and profitable business, the demand for FMCG products, and food products never falls. With the increasing trend of stress-free shopping and the availability of a large variety of products in the supermarket, people prefer to buy from the supermarket.

If you are exploring company registration for a supermarket then have a smooth reading of this article to get a clear idea about the advantages of supermarket business, How to register a supermarket business?, when to apply for GST registration, and how to comply with the Income Tax Act and GST Act?.

Registration of super supermarket business

For any business the initial step in starting is setting up a basic business structure, for this you are required to register your business in any of the recognized business structures in India.

This process is called registration of business, your supermarket business registration becomes recognized under tax laws and other business laws after registration of the supermarket.

Sole Proprietorship registration for supermarket

Most supermarkets are set up as sole proprietorship firm registration, the advantages of sole proprietorship firms, when coupled with the simplicity, and low third-party risk of supermarket business give a perfect synergy for business operations when there is only one owner.

We recommend setting up a sole proprietorship business for a supermarket in case of a single investor and head of the business. The choice of other forms of business does not have any added advantage.

What are the advantages of a sole proprietorship firm in the Income-tax Act?

• The Income Tax Act exempts sole proprietorship firms from TDS compliance if the firm is not liable to tax audit, the TAN number is not required to be applied until the turnover reaches the tax audit limit.
• There is no mandatory requirement for income tax return filing if total income is below the basic exemption limit and turnover from business does not exceed rupees 60 lakhs.
• The benefit of presumptive taxation U/s 44AD is available for a sole proprietorship, in which a fixed percentage of the profit of 6 % in case of receipts through the bank and 8 % for cash receipts to be declared.
• The Income Tax Act does not consider sole proprietorship firms as separate persons, therefore PAN number is not allotted separately for sole proprietorship firms. Income tax return filing is completed by clubbing the business income of the proprietorship firm with the business income of the individual.
• Business income is assessable at the slab rates applicable for individuals, therefore lower tax rates are applicable when total income together with the net profit is in a lower tax bracket.

Partnership firm registration for supermarket

It is wise to register the supermarket as a Partnership firm if the business is held by more than one family member, it can be used as a tax planning tool by adding any one of the family members in a partnership firm when the primary option is sole proprietorship firm registration.

We recommend partnership firm registration for additional income tax savings by adding one family member, partnership firm gives the flexibility to add a third person into the business in case moderate expansion is expected in the near future.

What are the advantages of a partnership firm in the Income-tax Act?

• The benefit of presumptive taxation is applicable U/s 44AD for turnover up to Rs. 2 crores
• The audit is required only if the turnover exceeds the first level of threshold limit for a tax audit.
• Tax audits can be again avoided by utilizing the benefits of presumptive taxation.
• If the firm opts for presumptive taxation, TDS provisions are not applicable.
• Partners are allowed to withdraw salary, and interest apart from the profits of the firm, therefore the tax saving through slab rates will be available by diversion of profits as remuneration and interest up to the allowed limit.

Private limited company registration for supermarket business

Registration of a private limited company for supermarket business is recommended where the goals are big such as rapid business expansion, providing franchise opportunities to third parties, etc.

It is the top form of business structure for private businesses, it is the business structure that has multiple compliance, and rules regarding the operations, financial transactions, and management is governed by the Companies Act 2013.

Advantages of private limited company registration

• Investors can be added without allowing them in the management of the business, by designating the investor as a shareholder, only directors are allowed to take part in the operations of the business actively.
• Increased ability for bank finance therefore, enhanced limits for cash credit, bank overdraft, and term loans are available for private limited companies.
• The lowest income tax rate for private limited companies at 25 % on net profits.
• Highest compliance ensures good business governance, which is defined as corporate governance by the Companies Act 2013.

Once the basic business structure is registered, there are other mandatory, conditional, and optional registrations. The registration requirements for other business laws are required to be complied. We have discussed some of the common other business registrations required for supermarket.

Other legal registration is required to start a supermarket

1. Food safety registration: Food safety basic registration is required to be applied for commencing the supermarket business, FSSAI state licenses are required to be applied for all the branches of the supermarket.
2. Trade License: This is the license issued by the local body of the area, to carry on the trade within the limits of the local area jurisdiction, for supermarket registration in Chennai, a trade license should be applied with the respective zone of Chennai corporation.
3. Fire Safety License: Every business within the limits of Tamil Nadu is required to apply fire safety license, the application for a fire safety license is applied with the jurisdictional fire safety department.
4. GST Registration: GST registration is mandatory only if the turnover exceeds Rs.40 lakhs for supermarket business in Chennai, the enhanced limit of Rs.40 lakhs is applicable with the condition that only trading is carried out and there is no interstate sales of goods. Practically GST registration is mandatory for supermarket businesses irrespective of the turnover, there is no value added by the supermarket which changes the nature of the product resulting in the change in GST rates of purchase and sales.Due to the same tax rate for purchases and sales, GST registration will increase profitability. Supermarkets can avail of input tax credits and this will increase profitability for supermarkets.
5. TAN number: The TAN number should be applied for partnership firms and proprietorship firms wherever required, for the private limited company by default TAN number will be allotted during the Pvt Ltd company registration process.

What are the returns and renewals applicable to Supermarkets?

1. FSSAI renewal: The food safety certificate is required to be renewed every year before the expiry of the license, food safety license once expired there will be a huge amount of penalty for renewal.
2. FSSAI updation: FSSAI licenses are required to be updated when there is a change in products sold and other information.
3. GST return filing: All the supermarkets that have registered GST need to file GST returns within the due date, The monthly return filing scheme is best for supermarket GST numbers.
4. GST amendment: Any amendment in the GST profile has to be made by applying for modification of core fields or non-core fields.
5. TDS returns: TDS returns are required to be filed for every quarter, and payment of TDS is required to be made for every month on or before 7th of the following month.
6. Income tax return filing: Income tax returns are required to be filed on or before 31st July if a tax audit is not applicable and on or before October 31st if a tax audit is applicable. Tax audit reports are required to be filed on or before 30th day of September.

We are experienced business registration consultants in Chennai, choose us as your dedicated supermarket registration consultant and tax advisor for GST registration and income tax filing for reliable and long-term benefits.