Most independent restaurants in India charge 5% GST on food and drink, with no input tax credit, whether the order is dine-in, takeaway, or delivered straight from the restaurant. The exceptions are restaurants inside hotels with high room tariffs, and a few catering setups. That one rule covers most of what confuses new owners, but the details around registration, invoices and filing are where people actually lose money or get a notice. Here is the practical version.
This is a working guide for owners and managers, not a substitute for your CA. Rates, thresholds and forms do change, so treat every number here as "true as we last checked" and confirm anything filing-critical on the GST portal or with your accountant before you file.
What you will get from this guide
- The GST rate that actually applies to your restaurant, and the two situations where it is not 5%
- Whether you need to register at all, and the composition scheme alternative
- What a valid restaurant tax invoice legally needs, item by item
- Who pays GST on your Zomato and Swiggy orders — you or the platform
- The filing rhythm (GSTR-1, GSTR-3B) and the mistakes that trigger notices
The rate almost every restaurant charges: 5%, no input tax credit
Since November 2017, standalone restaurants — AC or non-AC, dine-in, takeaway, or delivery direct from your own number — charge 5% GST (2.5% CGST + 2.5% SGST) on the food and beverage bill. The trade-off is you cannot claim input tax credit (ITC) on what you buy: rent, gas, ingredients, packaging, none of the GST you pay on those comes back to you against your output tax.
This is a flat, simple number by design. It's also why most restaurant POS and billing setups only need one GST slab configured for food items, not the multi-rate complexity a retail shop deals with.
The two situations where it is not 5%
Two cases pull restaurants out of the standard rate, and both are worth checking against even if they don't sound like you:
- Restaurants inside hotels with a high room tariff. If you operate a restaurant inside a hotel where any unit's room tariff is ₹7,500 or more per night, that restaurant charges 18% GST — but you get input tax credit on that 18%. A standalone restaurant a hotel merely leases space to is usually still 5%; it's the hotel's own room pricing that flips the rate, so this mainly matters if you run the F&B for a hotel property.
- Outdoor catering and banquet-style events. Catering for functions, weddings and corporate events is sometimes structured differently from walk-in restaurant service and can attract 18% with ITC depending on how the contract is written. If a meaningful share of your revenue is catering, get this specifically confirmed with your CA rather than assuming your restaurant's 5% rate carries over.
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Do you even need to register for GST?
Registration is based on aggregate turnover, not profit. Because restaurant service is classified as a service (not a sale of goods) under GST, the threshold is:
- ₹20 lakh a year in most states
- ₹10 lakh a year in special category states (most of the Northeast, plus a few hill states)
Cross that in a financial year and you must register, charge GST on your bills, and start filing — there's no grace period once you're over. A lot of new cafés and cloud kitchens register late simply because nobody was tracking cumulative turnover against the threshold; it's worth checking this monthly once you're within striking distance, not after the fact.
The composition scheme: simpler filing, but you give things up
If your turnover is under ₹1.5 crore a year (₹75 lakh in special category states), you can opt into the composition scheme instead of regular GST. You pay 5% of turnover as tax (still split 2.5% + 2.5%), file a simpler quarterly return, and skip the invoice-by-invoice GST bookkeeping.
The trade-offs: you cannot show GST as a separate line on the customer's bill (it has to be baked into the price, and the bill says "composition taxable person, not eligible to collect tax"), you cannot claim ITC, and there are restrictions on supplying through some e-commerce channels. For a small single-location café or cloud kitchen doing mostly cash and UPI dine-in business, this can genuinely save admin time. For anything selling meaningfully through Zomato or Swiggy, talk to your CA before opting in — the rules around composition dealers and e-commerce platforms have shifted more than once.
What a valid restaurant tax invoice actually needs
A handwritten total with "GST included" scrawled at the bottom is not a valid tax invoice, and it's the single most common gap we see when we onboard a restaurant that's been running on paper or a basic billing app. A proper invoice needs:
- Your restaurant's name, address and GSTIN
- A unique, sequential invoice number for the financial year (no gaps, no repeats — this is one auditors check first)
- Invoice date
- Customer name (and their GSTIN, if it's a B2B bill for a corporate account)
- SAC code 9963 (restaurant and catering services)
- Item description, quantity and taxable value
- GST rate and amount, split as CGST + SGST for an intrastate sale (almost every restaurant bill) or IGST for the rare interstate case
- Total invoice value
If you're doing more than roughly ₹5 crore in annual turnover, e-invoicing becomes mandatory — this threshold has been lowered several times over the years, so if you're anywhere near it, confirm the current figure rather than trusting last year's number.
Who pays GST on your Zomato and Swiggy orders?
This trips up almost every owner the first time it comes up. Since January 2022, Zomato and Swiggy are treated as the party responsible for collecting and depositing GST on restaurant orders placed through their apps, under Section 9(5) of the CGST Act. In plain terms: for orders that come through their platform, the platform pays the 5% GST to the government directly — you don't collect and remit it again on that same order.
What you still have to get right: your own direct sales — dine-in, QR ordering, phone orders, walk-in takeaway — are entirely your responsibility to invoice and file correctly, and your GSTR-1 needs to correctly separate "supplies made through an e-commerce operator liable under 9(5)" from your own direct taxable supplies. Reconcile the GST summary Zomato and Swiggy give you each month against what you report; mismatches here are one of the more common sources of GST notices for restaurants that sell on both channels.
The filing rhythm
Once registered under the regular scheme, most small and mid-size restaurants file:
- GSTR-1 — outward supplies (your sales), monthly or quarterly under the QRMP scheme if turnover is under ₹5 crore
- GSTR-3B — the summary return where you actually pay the tax, monthly or quarterly to match GSTR-1
- GSTR-9 — an annual return, required once turnover crosses ₹2 crore
The recurring failure mode isn't the math, it's the source data: bills that were never properly numbered, delivery-platform revenue mixed in with direct sales instead of kept separate, or a month where the POS export simply doesn't match the bank settlement. Clean, sequential, correctly-taxed invoices from day one save far more time at filing than any shortcut taken at billing.
The bottom line
For the vast majority of Indian restaurants, GST comes down to one number — 5%, no ITC — applied consistently, invoiced correctly, and filed on time. The complexity isn't the rate, it's the bookkeeping discipline: sequential invoice numbers, the right SAC code, a clean split between your direct sales and what Zomato or Swiggy already taxed on your behalf. Get your billing system generating that correctly from the first bill, and GST stops being something you dread every quarter.
Frequently asked questions
What GST rate do restaurants charge in India?
Standalone restaurants — dine-in, takeaway or direct delivery, AC or non-AC — charge 5% GST (2.5% CGST + 2.5% SGST) with no input tax credit. Restaurants inside hotels with room tariffs of ₹7,500 or more a night charge 18% with ITC instead.
Do I need to register for GST if my restaurant is small?
Only once your aggregate turnover crosses ₹20 lakh a year (₹10 lakh in special category states). Below that, registration isn't mandatory, though some owners register voluntarily to supply through certain B2B or e-commerce channels.
Can I claim input tax credit (ITC) on restaurant supplies?
Not under the standard 5% restaurant rate — that rate is explicitly without ITC. You only get ITC if you fall under the 18% hotel-restaurant rate or certain catering structures, which is why most restaurants stay on the simpler 5% no-ITC rate.
Who pays GST on my Zomato or Swiggy orders — me or the platform?
Since January 2022, Zomato and Swiggy are required to collect and deposit GST directly on orders placed through their apps. You still invoice and file GST on your own direct sales (dine-in, QR ordering, phone orders) as normal, and need to reconcile the two in your GSTR-1.
What details must a valid restaurant tax invoice include?
Your name, address and GSTIN, a unique sequential invoice number, the date, the SAC code 9963, item description and taxable value, and the GST amount split as CGST + SGST. A total with 'GST included' written at the bottom is not a valid tax invoice.
