Food trucks have become a popular entry point into the food business, lower setup costs than a full restaurant, the flexibility to move to where the footfall is, and a growing customer base that associates food trucks with quality street food. Like any food business, the income earned is taxable, and the mobile, vehicle-based nature of the operation brings a few specific cost categories worth understanding.
A food truck's vehicle is central to the operation, not just transport but the kitchen and serving counter itself. Costs specific to this include depreciation on the vehicle and the kitchen equipment built into it (commercial vehicles and equipment typically depreciate at rates specified for such asset categories), fuel costs for both running the vehicle between locations and, where applicable, running a generator to power kitchen equipment, vehicle insurance and maintenance, and parking or location fees paid to operate at particular spots (markets, event venues, designated food truck zones).
Once a food truck business's turnover crosses the applicable GST registration threshold, GST registration becomes mandatory, with food and beverage services attracting their own specific GST rate structure (similar considerations to those applicable to restaurants generally apply to food trucks as a category of food service provider). Below the threshold, registration may not be mandatory, but tracking cumulative turnover against the threshold is important as the business grows.
For eligible smaller food truck operations below the relevant turnover threshold, Section 44AD's presumptive taxation scheme could be considered, presuming income at a specified percentage of turnover and simplifying compliance, subject to the section's conditions, similar to how the scheme could apply to a small restaurant or cafe.
As a food truck business expands to multiple trucks or franchised locations, the overall scale may move the business beyond the eligibility limits for presumptive taxation, and the operation starts to resemble a more conventional multi-unit food business, with the income tax considerations that come with that scale, GST compliance across locations, potentially a more formal business structure (partnership, LLP, or company), and more detailed bookkeeping across units.