1When is restaurant GST 5%, and when is it 18%?
| Situation | Rate | Input tax credit |
|---|---|---|
| Standalone restaurant: dine-in, takeaway, own delivery | 5% | No |
| Restaurant in a hotel with no room above ₹7,500 a night (previous year) | 5% | No |
| Restaurant in “specified premises” | 18% | Yes |
| Outdoor catering | 5%, or 18% from specified premises | No at 5%, yes at 18% |
| Composition scheme, turnover up to ₹1.5 crore | 5% of turnover, no tax on the bill | No |
| Alcohol, anywhere | Outside GST | State VAT applies |
The logic to remember: 5% is a concessional rate that trades away input credit. You charge less tax, but the GST you pay on rent, equipment and supplies becomes a cost. A restaurant in specified premises charges 18% and recovers those credits. A standalone restaurant can’t choose 18%.
“Specified premises” has a legal definition. Since 1 Apr 2025 it rests on the previous financial year: premises of a hotel that supplied any room above ₹7,500 a night, or a hotel that has declared its premises to be specified premises. If your restaurant sits inside a hotel, ask your CA which side of the line it falls on this year.
The rate changes of 22 Sep 2025 cut GST on hotel rooms of up to ₹7,500 a night to 5% without credit. Restaurant service stayed where it was: 5% without credit, or 18% with credit in specified premises.
Work out the split on any bill. The calculator works to the paisa and gives the odd paisa to CGST, as a CountStand bill does:
GST on a bill
- Invoice total
- ₹1,050.00
- Taxable value
- ₹1,000.00
- CGST 2.5%
- ₹25.00
- SGST 2.5%
- ₹25.00
- GST at 5%, in all
- ₹50.00
Most restaurants charge 5% GST without input tax credit. 18%, with credit, applies inside specified premises: a hotel where any room was supplied for more than ₹7,500 a night in the previous financial year. Alcohol is outside GST and taxed under state VAT. The tax is worked to the paisa and the odd paisa goes to CGST, as on CountStand’s bills. General information, not tax advice: confirm your rate with your CA.
2What does a 5% bill look like on paper?
This is a CountStand tax invoice for a sample takeaway order at Akira, a sample café in Surat, printed by the product’s own printer code: five dishes, ₹890.00 before tax, serial INV/S0001/000184. The notes beside it say what each marked line is for.
Akira Ghod Dod Road, Athwalines, Surat, Gujarat GSTIN 24AAJCA4501K1ZW FSSAI 21525000000123 Akira - Surat------------------------------------------------TAX INVOICE INV/S0001/000184Date 29 Sept 2026, 13:39 Cashier Priya PatelCovers 1 takeawayPlace of Supply: 24-GujaratReverse charge: No ORIGINAL FOR RECIPIENT------------------------------------------------Item Qty Rate AmountPaneer butter masala with rotli (Full) 1 nos 290.00 290.00 + Extra gravyFilter coffee (Large) 2 nos 120.00 240.00Dabeli 2 nos 80.00 160.00Masala chai 2 nos 50.00 100.00Khaman dhokla 1 nos 100.00 100.00------------------------------------------------Subtotal Rs 890.00CGST 2.5% Rs 22.25SGST 2.5% Rs 22.25Round Off +0.50GRAND TOTAL Rs 935.00------------------------------------------------HSN/Tax summaryHSN 996331 Txbl 890.00 C 22.25 S 22.25------------------------------------------------Paid: UPI Rs 935.00 Thank you, visit again Authorised signatory: Akira ~~~~~~~~ CUT ~~~~~~~~
- GSTIN and FSSAIWho issued the bill, and their food licence.
- Place of supply24-Gujarat: the same state as the café, so the tax splits into CGST and SGST, not IGST.
- Each line, in fullThe portion and the add-ons stay on the dish they belong to.
- CGST and SGST2.5% each on ₹890.00: ₹22.25 and ₹22.25. An odd paisa would go to CGST.
- One round off+₹0.50, once, at the end, to the nearest rupee.
- The HSN summary996331, the code for restaurant service, with the tax at each rate.
- Taxable value
- ₹890.00
- Place of supply
- 24 · Gujarat
- CGST at 2.5%
- ₹22.25
- SGST at 2.5%
- ₹22.25
- Round off
- +₹0.50
- Total
- ₹935.00
Rule 46 of the CGST Rules lists what a tax invoice must carry:
- your name, address and GSTIN
- a consecutive serial number of up to 16 characters, unique for the financial year
- the date
- the guest’s GSTIN, if they are registered
- for an unregistered guest and a bill of ₹50,000 or more, their name and address
- the description, quantity and value of what you sold
- the taxable value, and the rate and amount of each tax
- the place of supply, for a sale across a state border
- your signature or digital signature
Two other kinds of bill exist. If you aren’t registered for GST, you issue a bill or receipt with no GST on it. If you are on the composition scheme, you issue a bill of supply, with no tax on it, headed “composition taxable person, not eligible to collect tax on supplies”.
In CountStand, the state you set determines whether a bill carries CGST and SGST or IGST. Leaving the GSTIN empty prints receipts, and switching on composition prints a bill of supply with no tax lines. CountStand refuses to print a bill that isn’t legal, and names the field to fix: a missing FSSAI number, a GSTIN that doesn’t match your state, an address with no town, a tax rate with no HSN or SAC code, or a bill of ₹50,000 or more with no customer name.
3Which returns does a restaurant file?
- GSTR-1, your sales: by the 11th of each month, or by the 13th after each quarter under the QRMP scheme (for turnover up to ₹5 crore).
- GSTR-3B, the summary return where the tax is paid: by the 20th of each month, or by the 22nd or 24th after each quarter under QRMP, depending on your state, with tax paid monthly.
- GSTR-9, the annual return, above the turnover the government notifies for the year.
- On composition: CMP-08 each quarter, by the 18th of the month after it, and GSTR-4 once a year, by 30 Apr.
Where restaurants lose hours is GSTR-1: every invoice of the month, in sequence, classified and reconciled. If the invoice numbering broke during an outage, or an afternoon went on a paper bill book, month-end turns into archaeology. CountStand keeps one consecutive serial per GSTIN per year, splits CGST and SGST to the paisa on every bill, and gives you each month’s sales as one file, GSTR1_092026.json for September 2026, ready for your CA or the GST portal.
4How does GST work on Zomato and Swiggy orders?
Since 1 Jan 2022, food delivery apps collect and pay the 5% GST on restaurant service ordered through them, under section 9(5) of the CGST Act. For those orders:
- Don’t charge GST again. The app has already charged the guest, and it pays the tax to the government.
- Report them anyway. These sales still appear in your returns, in the tables for supplies on which an e-commerce operator pays the tax. Your CA will place them.
- The app’s own fees carry 18% GST. Its invoice to you for commission, ads and other services carries 18%, and at the 5% rate you can’t claim it back.
- Reconcile. Tie each payout statement to your own record of the orders, so nothing is counted twice or missed.
Orders guests place with you directly, at the table, at the counter or by phone, are yours to tax and report as usual. CountStand covers dine-in and takeaway. Delivery-app orders are not open at launch, so every bill CountStand prints is your own supply.
5Is the composition scheme right for a restaurant?
A restaurant that doesn’t serve alcohol, with turnover up to ₹1.5 crore in the previous year (₹75 lakh in some special-category states), can opt for composition. It pays 5% of its turnover (2.5% CGST and 2.5% SGST), files less often and keeps simpler books.
The trade-offs:
- no input tax credit, as at 5% anyway
- no tax on the bill: you can’t collect it from guests, so it comes out of your price
- a bill of supply instead of a tax invoice, and “composition taxable person” on your signboard
- if you sell through delivery apps, ask your CA how composition sits with them before you opt in
For a small counter or café with simple sales, it can be the easier life. Once delivery apps or a second outlet enter the plan, regular registration usually fits better. Model both with your CA.
6When do you need to register, and does e-invoicing apply?
Registration is compulsory once your aggregate turnover crosses ₹20 lakh in a financial year (₹10 lakh in a few special-category states), counted across your PAN. Each state you operate in needs its own GSTIN.
E-invoicing applies to business-to-business invoices once your aggregate turnover, in any year since 2017-18, has crossed the notified threshold: ₹5 crore since 1 Aug 2023. A guest’s dinner bill is business-to-consumer and is not e-invoiced. A catering invoice to a registered company is business-to-business and is. Confirm the current threshold with your CA.
7Does GST apply to a service charge or a delivery charge?
Yes. A service charge, packing charge or delivery charge you add to your own bill is part of the value of what you sold, and it takes the same 5%.
A service charge itself is optional. The Central Consumer Protection Authority’s guidelines of 4 Jul 2022 bar adding one by default or making it compulsory, and a single judge of the Delhi High Court upheld them on 28 Mar 2025. If a guest asks for it to come off, it comes off. In CountStand the service charge starts switched off on every new bill, and it can be removed without a PIN.
8The one-screen summary
- Standalone restaurant: 5%, no input credit, CGST and SGST on every bill.
- Restaurant in a hotel: check the specified-premises test for 18% with credit.
- Delivery-app orders: the app pays the 5%; you report them and reconcile.
- Under ₹1.5 crore, no alcohol, simple sales: ask your CA about composition.
- Bills: a consecutive serial, your GSTIN and FSSAI number, SAC 996331, the split shown.
- Returns: GSTR-1 and GSTR-3B on time, every month or quarter, reconciled to the paisa.
The GST calculator and the restaurant bill generator are free to use either way.
9Questions owners ask
5% without input credit for nearly all restaurants, for dine-in, takeaway and delivery. 18% with input credit applies only in specified premises: broadly, hotels where any room went above ₹7,500 a night in the previous financial year. Alcohol is outside GST and carries state VAT.
Not at the 5% rate: input credit is barred there. Restaurants correctly charging 18% in specified premises can claim it. Claiming credit while charging 5% is a common reason for a notice.
Since 1 Jan 2022 the delivery app collects and pays the 5% GST on food ordered through it, under section 9(5). The restaurant doesn’t charge it again, still reports those sales in its returns, and reconciles the payout statements with its own records.
An option for restaurants that don’t serve alcohol, with turnover up to ₹1.5 crore: pay 5% of turnover, file CMP-08 each quarter and GSTR-4 each year, and issue bills of supply with no tax on them. There is no input credit, and no tax is collected from guests.
Only for business-to-business invoices, and only once aggregate turnover in any year since 2017-18 has crossed the threshold: ₹5 crore since 1 Aug 2023. Bills to diners aren’t e-invoiced. Confirm the current threshold with your CA.
Yes. A service charge on your bill is part of the value of the supply and takes the same 5%. It must also be optional: the CCPA’s guidelines of 4 Jul 2022 bar adding it by default.