GST rates on restaurant bills
- 5%, without input tax credit: almost all restaurants, cafés, dhabas, bakeries serving food, takeaway counters and cloud kitchens, AC or non-AC.
- 18%, with input tax credit: restaurants inside hotels where any room is priced above ₹7,500 a night.
- Composition scheme: you pay a flat rate on turnover yourself and must not charge GST to guests. Issue a bill of supply, not a tax invoice.
- Alcohol isn't under GST. Bars charge state VAT on liquor and GST on food, usually on separate bills or lines.
What GST is charged on
GST is worked out on the taxable value: the food total after discount, plus service charge and packaging or delivery charges if you add them. Within your state you split it equally into CGST and SGST, so 5% becomes 2.5% + 2.5%.
If your menu prices include GST, the tax is already inside the price: a ₹105 dish at 5% is ₹100 of food and ₹5 of GST.
Service charge
Under the Central Consumer Protection Authority's 2022 guidelines, a restaurant can't add a service charge to the bill by default or make it compulsory. Guests can choose to pay it. If it is on the bill, GST applies to it too.
Swiggy and Zomato orders
For food ordered through an aggregator, the aggregator collects and pays the 5% GST, so you don't add GST to those orders yourself. The commission they charge you carries 18% GST. The commission calculator counts it.
QRkey sets up your taxes once and applies them to each section and item automatically, with CGST, SGST and round-off on every bill. Read GST on restaurant bills, explained simply.
Questions
Is GST charged before or after the discount?
After. A discount shown on the bill reduces the taxable value, so GST is worked out on the discounted amount.
Why is there a round-off line?
Bills are usually paid in whole rupees. The round-off line shows the paise added or taken away, so the bill still adds up exactly.
Can I rely on this for my GST returns?
Use it to check bills and understand the maths. For returns, rates for your business and anything unusual, ask your CA, because rules and notifications change.
