Tax Compliance Guide

GST for Restaurants in India

Everything you need to know about GST - rates, input tax credit, composition scheme, invoicing, and filing. Updated for 2024.

GST Rates for Different Restaurant Types

GST RateApplicable ToITCExamples
5%Standalone restaurants (no AC or no liquor)No ITC availableSmall eateries, dhabas, non-AC restaurants, takeaway outlets
5%Restaurants inside hotels (room tariff < ₹7,500)No ITC availableBudget hotel restaurants, mid-range hotel dining
18%Restaurants inside hotels (room tariff ≥ ₹7,500)Full ITC availableLuxury hotel restaurants, 5-star dining
18%Outdoor catering servicesFull ITC availableWedding catering, corporate catering, event catering
5%Cloud kitchens & food deliveryNo ITC availableDelivery-only kitchens, aggregator-based food delivery

Invoice Requirements

Every GST invoice must contain these elements:

Restaurant name, address, and GSTIN
Invoice number (unique, sequential)
Date of invoice
Customer name (for B2B)
HSN/SAC code for food items
Taxable value and GST amount separately
Place of supply
Signature or digital signature

GST Filing Schedule

GSTR-1

Outward supplies (sales)

Due: 11th of next month

GSTR-3B

Summary return with tax payment

Due: 20th of next month

GSTR-9

Annual return

Due: 31st December

GSTR-4

Composition scheme (if applicable)

Due: Quarterly

Common GST Questions

Should I charge 5% or 18% GST at my restaurant?

Most standalone restaurants charge 5% GST without ITC. If your restaurant is inside a hotel with room tariff ₹7,500 or above, you charge 18% with full ITC. For outdoor catering, it is always 18%.

What is Input Tax Credit (ITC) and should I care?

ITC lets you offset GST paid on purchases against GST collected. At 5% GST, you cannot claim ITC. At 18%, you can. If your input costs are high (rent, equipment), 18% with ITC might be better.

Can I use composition scheme for my restaurant?

Yes, if turnover is below ₹1.5 Crore. You pay 5% on turnover (1% for manufacturers). Simpler compliance but no ITC and cannot collect GST from customers.

How do I handle Swiggy/Zomato orders for GST?

Aggregators deduct TCS (Tax Collected at Source) at 1%. You still charge 5% GST to customers. Reconcile TCS in your GSTR-3B.

Do I need to show GST separately on bills?

Yes! GST must be shown separately on invoice. You can show inclusive price but breakup of taxable value and GST must be clear.

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