GST on Restaurant Services — Rate Summary
GST on restaurant food depends on the type of restaurant, location, and mode of service. The rates range from 0% (exempt fresh food) to 18% (hotel restaurants).
| Restaurant Type | GST Rate | ITC Available? |
|---|---|---|
| Standalone restaurant (dine-in or takeaway) | 5% | No |
| Restaurant in hotel (room tariff below ₹7,500/night) | 5% | No |
| Restaurant in hotel (room tariff ₹7,500 or above/night) | 18% | Yes |
| Outdoor catering services | 18% | Yes (with conditions) |
| Food delivery via Zomato / Swiggy | 5% (ECO pays) | No |
| Composition scheme restaurant | 5% (flat, no ITC) | No |
💡 Zomato / Swiggy GST — Important Change
From January 1, 2022, Zomato and Swiggy (as E-Commerce Operators) are required to collect and pay 5% GST on restaurant services ordered through their platforms — the restaurant itself does not pay GST on such orders. This is a TCS-like mechanism for food delivery.
GST on Packaged and Processed Food
| Food Item | GST Rate |
|---|---|
| Fresh fruits, vegetables, rice, wheat (unbranded) | Exempt (0%) |
| Branded packaged cereals, pulses, flour | 5% |
| Sugar, tea, coffee (not instant) | 5% |
| Edible oils | 5% |
| Milk (pasteurised, branded) | Exempt |
| Butter, ghee, cheese | 12% |
| Packaged namkeen, bhujia, mixtures | 12% |
| Instant noodles, pasta | 12% |
| Biscuits (all types) | 18% |
| Chocolate and cocoa products | 18% |
| Aerated drinks, soft drinks | 28% + 12% cess |
| Ice cream | 18% |
| Fruit juices (100% natural) | 12% |
| Mineral water (packaged) | 18% |
GST Registration for Restaurants
Restaurants must register for GST if:
- Annual turnover exceeds ₹20 lakh (regular states)
- Annual turnover exceeds ₹10 lakh (special category states)
- They supply food through e-commerce platforms (Zomato, Swiggy) — mandatory regardless of turnover
Composition Scheme for Restaurants
Restaurants with turnover up to ₹1.5 crore can opt for the Composition Scheme and pay a flat 5% GST on turnover without maintaining detailed input/output records. This is the simplest compliance option for small restaurants.
- File quarterly returns instead of monthly
- Cannot issue tax invoices — only bill of supply
- Cannot claim ITC on purchases
- Cannot supply inter-state or through e-commerce
📊 Check Composition Scheme Eligibility
Use our free Composition Calculator to check if your restaurant qualifies and compute your tax liability.
Composition Calculator →Service Charge vs GST — Important Distinction
Service charge is not GST. It is an optional amount charged by restaurants to customers — it goes to the restaurant, not the government. As per consumer protection guidelines, service charge is not mandatory and customers can refuse to pay it. GST is a government tax and is mandatory where applicable.
⚠️ GST on Service Charge
If a restaurant charges service charge, GST is levied on the total bill including service charge. So the effective GST base includes the service charge amount.
Frequently Asked Questions
I own a small dhaba — do I need GST registration?
Only if your annual turnover exceeds ₹20 lakh. Most small dhabas fall below this threshold and do not need to register.
The restaurant billed me 18% GST — is that correct?
Only if the restaurant is in a hotel where room tariff is ₹7,500 or more per night. Standalone restaurants should charge only 5% GST. If overcharged, you can request a corrected bill.
Does GST apply on home-cooked food delivery?
Home-based food businesses (cloud kitchens operating from home) are treated the same as restaurants — 5% GST applies if turnover exceeds the threshold, and mandatory registration if supplying through Zomato/Swiggy.
Can restaurants claim ITC on kitchen equipment?
Most standalone restaurants (5% GST, no ITC) cannot claim ITC. Only restaurants in 5-star/luxury hotels charging 18% GST can claim ITC on kitchen equipment and other business inputs.