The GST regime of indirect taxation has subsumed most of the indirect taxes levied on the sale and purchase of goods and services in India. The price of numerous commodities and services have been affected due to the multiple indirect taxes imposed. When it comes to the restaurant business, the rate of GST on restaurants has been a debatable issue. Under the pre-GST regime, the bill of the restaurant included VAT, Services Tax and Service Charge. The particulars of a restaurant bill before GST regime were as follows:
Price of food Item: The price stated in the Restaurant’s Menu card is the price on which the different taxes were calculated.
VAT: The Indirect tax levied on food items ordered.
Service Tax: The indirect tax levied on services provided by restaurants.
Service Charge: This is not an indirect tax, but a charge levied by restaurants over and above Service Tax. The amount of Service Charge charged by the restaurant was not included in tax collected by the government.
Rate of GST on Restaurant Bills
| Type of Restaurants | Tax Rate |
| Restaurants (Stand Alone) | 5% without Input Tax Credit |
| Restaurant being a part of a Hotel (where the declared tariff of the accommodation is not exceeding Rupees 7500) | 5% without Input Tax Credit |
| Restaurant being a part of a Hotel (where the declared tariff of the accommodation exceeds Rupees 7500) | 18% with Input Tax Credit |
| Regular Catering at say Company premises | 5% without Input Tax Credit |
| Outdoor catering service | 18% with Input Tax Credit |
The restaurant business is eligible to opt composition scheme under the GST law. However, the restaurant is required to follow the prescribed composition GST rules.
The rate at which restaurants are required to pay GST is fixed at a concessional rate of 5% which is to be levied on the turnover subject to the following restrictions:
- The Turnover of the restaurant should not exceed Rs 1.5 Crores (Rupees 150 lakhs). However, this limit Rupees 1 Crore for special category States.
- The restaurant should not be engaged in any services other than restaurant subject to certain exemptions.
- The restaurant can’t be engaged in the interstate supply of goods
- The restaurant can’t supply any items exempt under GST.
- The restaurant can’t supply goods through an e-commerce operator
- The restaurant can’t avail any ITC (Input Tax Credit)
- The restaurant can’t collect taxes from the customer
In addition to this the Restaurant opting for Composition Scheme is required to:
- mention the words “composition taxable person, not eligible to collect tax” on the bill of supply.
- mention the words ‘composition taxable person’ on every notice or signboard at their place of business or additional place of business.
Regular Tax Payer V/s Composition dealer
| Particulars | Regular Scheme | Composite Scheme |
| Registration | Threshold limit – Rupees. 20 Lakhs | Threshold limit – Rupees. 150 lakhs (1.5 Cr) |
| Business Territory | No restriction on supply of goods or services | Restricted to Intra-State Supply |
| Switching to Composition from Regular or Vice versa | The Compliance procedure is high | Once the limit is crossed, registration under regular provisions is compulsory |
| Input tax credit (ITC) | Eligible | Not Eligible to avail ITC |
| Business through e-commerce operator | Supplier can supply goods through e-commerce operator | Composition dealer cannot supply goods through e-commerce operator |
| Collection of Tax | Eligible to collect tax from the customer | Cannot collect tax from the customer |
| Tax invoice | Can issue a tax invoice for outward supply | Instead of Tax Invoice can raise Bill of Supply |
| GST returns | Monthly returns | Quarterly returns |
I require HSN codes for dishes like dal makhani Shahi paneer fried chicken. Where to find the same. I have a regular gst number
GST turnover limit Rs 40 Lac not allowed to restaurant & cafe??
i have Restaurant business gst regular RC I pay gst 5% rate but i am claim itc on commissions from (services swinggy, zomota ) gst 18% just tell me sir is wrong or right
I am providing lodging as well as resturant services
on resturnat i charge 5% gst & loding -18%
so what % should i levy to those customers who takes lodging as well as resturant services??
And can i claim itc on 5% or 18% or both services received?
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Hi ,
A Food Operator taken a franchisee is serving ice Cream to their customer through the Retail shops in India and Also through E-commerce Operator with the rate of 5%, Such person also not taken any Composition scheme for the Restaurants, Now the queries are:-
1. Franchisee fees, Rental for retail shops could be allowed as an input tax credit.
2. If such person Also further Give there franchisee rights to other one and receipt some amount than can we offset the franschisee fees Input tax credit against the tax liability on Receipt amount.
Now Restaurant started taking SERVICE tax also with GST..! Is it appropriate to give Service tax also ..?
If service tax is mentioned on menu Card it is a complusion that is what they say … is this true..?
Please reply so that we come to know
What’s the treatment of GST if the restaurant has tie up with Zomato?
Can anybody clarify whether restaurant services provided from restaurant situated at amusement park will be considered as restaurant service itself under GST. Also is there any applicability of concept of mixed supply or composite supply?
mostly the price list from the suppliers are exclusive of GST and at the bottom or any side they are noted that the “Local tax extra”.
Here one may note to verify that the prices mentioned in menu card are whether inclusive or exclusive of GST. In case inclusive of GST, your bill should not exceed this price as mentioned in menu card/price list. Need to check this before making payment.