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The GST on restaurant food is 5% for almost all restaurants in India, covering dine-in, takeaway, and delivery, whether the outlet is air-conditioned or not. A higher rate of 18% applies only in special cases, restaurants inside hotels where the room tariff is 7,500 rupees or more per night, and outdoor catering. So for a normal meal at a standalone restaurant, you pay 5% GST on the food bill. Restaurants charging 5% cannot claim input tax credit, while those charging 18% can. Yes, GST is applicable on restaurant food, it replaced older taxes like VAT and service tax back in 2017. Packaged food items are taxed differently from restaurant service. This explainer answers exactly what the GST on restaurant food is, how much you pay, when the higher rate applies, and what it means for diners and franchise owners running a restaurant business across India.
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Is GST Applicable on Restaurant Food?
Yes, GST is applicable on restaurant food across India. When you eat out, order in, or take away, a Goods and Services Tax is added to your food bill.
GST replaced the older mix of VAT and service tax in 2017, creating one simple tax on restaurant food. It applies to nearly every type of food outlet, restaurants, cafes, bakeries, sweet shops, quick-service outlets, and cloud kitchens. The only food not covered is alcohol, which each state taxes separately. So whenever you buy prepared food from a restaurant, GST is part of the bill. GST applies to almost all restaurant food you buy in India.
How Much GST on Restaurant Food Do You Pay?
The GST on restaurant food is 5% for the large majority of outlets. This single rate keeps things simple for both customers and owners.
The 5% is made up of 2.5% CGST and 2.5% SGST, and it applies to dine-in, takeaway, and delivery orders alike. On a 1,000 rupee food bill, that means 50 rupees of GST, for a total of 1,050 rupees. This rate is the same whether the restaurant is air-conditioned or not, a small cafe or a large outlet. For everyday dining, 5% is the answer to how much GST on restaurant food you pay.
What Is the GST Rate on Restaurant Food in Different Cases?
The GST rate on restaurant food is either 5% or 18%, depending on the type of establishment. Knowing which applies helps you understand any restaurant bill.
The Two Rates Explained
Here is how the GST on restaurant food in India works:
- 5% GST (no input tax credit): standalone restaurants, cafes, takeaways, cloud kitchens, and quick-service outlets, whether AC or non-AC
- 18% GST (with input tax credit): restaurants inside hotels with a room tariff of 7,500 rupees or more per night, and outdoor catering services
The rate for a hotel restaurant is set by the room tariff, not by the food price. If even one room in the hotel is priced at 7,500 rupees or above, the attached restaurant charges 18% on the whole bill. For most diners, though, 5% is what shows on the bill. The type of outlet decides the GST rate you pay.
Why Do Some Restaurants Charge 18% GST?
Some restaurants charge 18% GST because they fall into the luxury or catering category, which comes with the benefit of input tax credit. This is the exception, not the everyday rule.
A restaurant inside a hotel with a room tariff of 7,500 rupees or more per night must charge 18%, but it can then claim input tax credit on its purchases, such as ingredients, rent, and equipment. Outdoor catering for weddings and events also attracts 18% with credit. Because these businesses carry higher costs, the credit helps balance them. A standalone restaurant cannot simply choose 18% to gain credit. The 18% rate is reserved for specific luxury and catering cases.
How Is GST on Food Items Different From Restaurant Service?
GST on food items in a restaurant is not always the same as GST on the restaurant service itself. Packaged and branded items can be taxed differently from a cooked meal.
When you eat a cooked meal, the 5% restaurant service rate usually applies to the whole bill. But sealed, packaged food, like a branded bottled drink or a packaged snack sold separately, can carry its own GST rate, often higher. This is why a packaged item bought off the shelf may be taxed differently from the same-value cooked dish. For most dine-in meals, though, the single 5% service rate applies. Knowing this difference helps you read a mixed bill correctly.
How Do You Calculate GST on a Restaurant Bill?
Calculating GST on a restaurant bill is simple once you know the rate. For most meals, you just add 5% to your food total.
A Simple Example
Suppose your food and drinks (non-alcoholic) come to 2,000 rupees at a standalone restaurant. The GST is 5%, which is 100 rupees, split as 50 rupees CGST and 50 rupees SGST. Your final bill is 2,100 rupees, plus any optional tip you choose to give.
What to Check on Your Bill
Always check that the restaurant charges 5%, not 18%, unless it is inside a high-tariff hotel. Alcohol will be listed separately with its own state tax, not GST. If a standalone restaurant charges you 18%, you can ask for a corrected bill. Knowing how to read the bill helps you confirm you are paying the right tax.
How Is GST Charged on Online Food Orders?
GST on online food orders is 5%, but since 2022 the delivery platforms collect and pay it instead of the restaurant. This changed how tax works for app-based food.
When you order through Zomato or Swiggy, the platform collects and pays the 5% GST on the food under the rules, while the delivery fee itself carries 18% GST. The restaurant still records these sales in its GST returns, even though the platform handles the food tax. For you as a customer, the food is still taxed at the same 5%. On delivery apps, the platform now carries the tax responsibility for the food.
What Does GST Mean for Restaurant and Franchise Owners?
For restaurant and franchise owners, GST means charging the correct rate, filing returns properly, and using the right codes. Handling this well keeps the business compliant and penalty-free.
Key Points for Owners
Owners should remember:
- Charge 5% GST unless you truly qualify for the 18% category
- Do not charge 18% just to claim credit if you are a standalone restaurant
- Use the correct SAC code 9963 on invoices and returns
- File GST returns accurately and on time
- Report delivery-app sales even though the platform pays that GST
A strong franchise brand helps new owners get all of this right from day one through proper systems and training. Handling GST correctly protects an outlet from notices and penalties.
How Does a Franchise Help With GST and Compliance?
A good franchise helps with GST and compliance by giving owners ready systems, billing setup, and training, so they apply the right rate from the start. This removes the guesswork for first-time owners.
When you join a brand like Tandooriwala, you get SOP training, operational guidance, and 24×7 support that helps set up correct billing and smooth day-to-day running. Founded in 2013 by Michelin-star Master Chef Shajahan M Abdul, Tandooriwala supports over 86 outlets with complete systems that cover the operational side of a compliant restaurant, one of the clear benefits of buying a restaurant franchise. This means a new owner is never left guessing on the basics. A strong franchise turns GST and compliance into a guided, simple process.
Frequently Asked Questions
The GST on restaurant food is 5% for almost all restaurants, including dine-in, takeaway, and food delivery. Restaurants located inside hotels with room tariffs of ₹7,500 or more per night charge 18% GST.
Yes. GST applies to almost all restaurant food, including cooked meals, takeaway orders, and online food delivery. However, alcoholic beverages are not covered under GST and are taxed separately by individual state governments.
Most restaurants charge 5% GST on food. A higher 18% GST applies only to restaurants operating within high-tariff hotels and to outdoor catering services.
No. Freshly prepared restaurant meals generally attract 5% GST, while packaged or branded food products sold separately may fall under different GST slabs, depending on the product category.
Yes. Food ordered through platforms like Zomato and Swiggy includes 5% GST on the food value. In addition, 18% GST is charged on the delivery or convenience fee, where applicable.
