A bakery or mithai shop runs on speed. Customers queue at the counter, half the items are sold by weight, and festival weeks can do a month's business in five days. On top of that, GST on bakery products changed in September 2025, so a lot of shops are still billing old rates. This guide covers what bakery billing software needs to handle, with the current GST rates and worked examples.
GST on Bakery Products and Sweets (from 22 September 2025)
| Item | HSN | GST now | Before |
|---|---|---|---|
| Bread, roti, khakhra | 1905 | 0% | 0–5% |
| Cakes, pastries | 1905 | 5% | 18% |
| Biscuits, cookies | 1905 | 5% | 18% |
| Sweets (mithai), namkeen, bhujia | 2106 | 5% | 5–12% |
| Chocolates | 1806 | 5% | 18% |
| Ice cream | 2105 | 5% | 18% |
| Paneer | 0406 | 0% | 5% |
Almost everything a bakery sells is now 5%, and bread is nil. That is good for customers, but only if the rates in your billing system have been updated. Check the full new GST rates list for packaged items you resell, like juices and namkeen packs.
If customers eat at tables in your shop, that part of the business may be treated as a restaurant service (5% without input tax credit) rather than a sale of goods. If you run a café corner, ask your CA how to split it.
Selling by Weight
Mithai, dry fruits and loose namkeen are sold by the kilogram, so your software must take quantities like 0.250 or 0.750 kg and price them from the rate per kg.
Example: 750 g of kaju katli
Your rate is ₹1,200 per kg, tax included. For 0.750 kg the customer pays ₹900. At 5% GST the taxable value is ₹900 ÷ 1.05 = ₹857.14, and GST is ₹42.86 (CGST ₹21.43 + SGST ₹21.43). The bill should show the weight, the rate per kg and this split, and good software works it out the instant you type 0.750.
Expiry and Batch Tracking
Fresh cakes last days, packaged biscuits last months, and both cost money when they expire on the shelf. Record a batch and expiry date when stock comes in, and check a short-expiry list every morning. Anything expiring in the next few days goes to the front of the counter or into a combo offer, not into the bin.
Custom Cake Orders and Advances
Birthday and wedding cakes are booked days ahead with an advance. Bill the order with the customer's phone number, take the advance as a part payment, and the balance stays as due on that bill. When the customer collects the cake, the remaining amount is collected against the same bill, so there are no loose slips and no forgotten balances.
Example: a 2 kg custom cake at ₹1,050 including 5% GST (taxable ₹1,000, GST ₹50). The customer pays ₹500 advance, and ₹550 shows as due until pickup.
Handling the Festival Rush
- Tap-to-bill item grid: your top sweets and cakes as buttons, grouped by category, so the counter never searches.
- Barcodes on packed boxes: pre-pack Diwali boxes with printed labels and scan them.
- Split payment: cash plus UPI on the same bill without fuss.
- Offline billing: the counter keeps working if the internet drops, and bills sync later.
- Corporate orders: a proper GST tax invoice with the company's GSTIN for bulk gift boxes, so they can claim credit.
Bringing Customers Back
Bakeries thrive on regulars. Capturing the phone number at billing lets you send the bill on WhatsApp, run loyalty points and see who has stopped coming. Our guide to loyalty points for retail shops shows how to set a reward rate that protects your margin.
How Billux Fits a Bakery or Sweet Shop
Billux's retail counter gives you a tap-to-bill item grid with categories, barcode scanning, quantities to three decimals for weight sales, custom units such as kg and box, batch and expiry tracking, part payments with dues, split payments and WhatsApp bills. Offline billing and loyalty points are part of the Professional plan (₹5,500 a year), and the Standard plan is ₹2,500 a year (see pricing). Billux does not do recipe or production costing, so if you need ingredient-level costing you will need a separate tool for that part. Larger stores selling packaged food at scale may find the supermarket counter a better fit.
Setting Up Your Bakery Item List
- Group items into categories the counter thinks in: cakes, pastries, breads, biscuits, sweets, namkeen, beverages.
- Choose the unit per item: kg for loose sweets and namkeen, piece for pastries and buns, box for packed gifts.
- Set the right GST rate per item: bread at 0% and cakes at 5% sit next to each other, and one wrong rate repeats on every bill.
- Enter the shelf life for packed goods, so batches carry an expiry date.
- Put your 20 best sellers on the first screen of the tap-to-bill grid.
Daily Closing and Wastage
At closing, compare the day's sales report with the cash drawer and the UPI and card totals. Then record wastage: unsold fresh items that cannot be sold tomorrow should be written off as a stock adjustment, not left in the system. If you skip this, your stock report slowly fills with cakes that no longer exist, and your margin looks better on paper than in the bank. A weekly look at wastage by item tells you what to bake less of. Our inventory management guide covers stock adjustments and counts in more detail.
Corporate and bulk gift orders
Diwali and wedding-season orders from companies are often your biggest bills of the year. Issue a proper tax invoice in the company's name with its GSTIN, so it can claim input tax credit, and agree any bulk discount before billing so it appears on the invoice. For deliveries to several offices, a delivery challan per drop and one consolidated invoice keeps the paperwork simple. Collect an advance on large orders and track the balance as a due against the bill.
The Bottom Line
For a bakery or sweet shop, the right billing software sells by weight in one keystroke, warns you before stock expires, keeps cake advances straight and charges the new 5% and 0% rates correctly. Get those four right and the festival rush becomes a good problem.
Frequently Asked Questions
What is the GST rate on cakes and pastries?
Cakes and pastries are taxed at 5% GST from 22 September 2025, down from 18%. Plain bread is 0%.
What is the GST rate on sweets (mithai)?
Sweets and namkeen are generally taxed at 5% GST. If they are served for eating on the premises as a restaurant service, restaurant rules may apply instead.
Can billing software sell sweets by weight?
Yes. Set the item's unit to kg with a rate per kg, then enter quantities such as 0.250 or 0.750. The software calculates the price and the GST split.
How do I bill a cake order with an advance?
Create the bill when the order is booked, record the advance as a part payment, and the balance stays as due on that bill. Collect the rest against the same bill when the customer picks up the cake.
Does a bakery need GST registration?
A bakery selling goods must register once its annual turnover crosses ₹40 lakh in most states (the limit is lower in a few states), or earlier if it sells inter-state or through an e-commerce operator.
