The restaurant gst rate is 5% without input tax credit for food served in a restaurant, dhaba, cafe, canteen or cloud kitchen, whether eaten in, taken away or delivered. The one higher case is dining at a hotel that lets rooms for more than Rs 7,500 a night: that is a specified premises, and its restaurant charges 18% with credit.
Food ordered through a delivery app is taxed at the same 5%, but the app operator collects and pays it. This page lists the SAC codes, explains the bill format, service charge, catering and the composition option. Groceries and packaged food are on the food items hub.
Restaurants: codes and GST rates
Item / SAC / GST- Restaurant, dhaba, cafe, dine in or takeaway5% (no ITC)SAC 996331
- Food delivered through a delivery app5% (no ITC)App operator pays the tax
- Cloud kitchens5% (no ITC)Same restaurant entry
- Canteens and messes5% (no ITC)Including office canteens run by a contractor
- Restaurant in a hotel with rooms above Rs 7,500 a day18%Specified premises, with credit
- Outdoor catering5% (no ITC)18% at specified premises
- Service charge added to the bill5% (no ITC)Part of restaurant value
- Packaged drinks sold as goods, not served40%Aerated drinks sold over the counter
Quick facts
SAC
996331 restaurant service, 996334 catering, 996332 and 996333 relatedGST rate
5% without input tax creditSpecified premises
18% with creditDelivery apps
Operator collects and pays the 5%Service charge
Taxed with the foodComposition option
5% of turnover for restaurants
Gst on restaurant bill
Restaurant bill inside the state: Food and beverages, SAC 996331, value Rs 1,200. Service charge Rs 60. Taxable value Rs 1,260. CGST 2.5% Rs 31.50. SGST 2.5% Rs 31.50. Total Rs 1,323.
The bill should show the restaurant's GSTIN and the tax split. A restaurant charging 5% cannot take credit of GST paid on rent, furniture, equipment or ingredients, so these are costs.
Specified premises: when 18% applies
A hotel that supplies accommodation at more than Rs 7,500 per room per day, at any time in the previous year, is a specified premises. Restaurants in such hotels charge 18% and can take full credit. A hotel can also declare itself as a specified premises under the rules. Details on room rates are on the hotel rooms page.
Food delivery apps
When food is ordered through a delivery app, the app operator is treated as the supplier of the restaurant service for tax purposes. It collects 5% from the customer and pays it to the government. The restaurant does not charge GST again on those orders, but still shows them in its returns as supplies through an operator.
Outdoor catering and canteens
Outdoor catering at weddings and events is 5% without credit, or 18% with credit at specified premises. Event management firms that bundle catering with decoration and venue may supply a composite service; see event management. Canteens run by a contractor for a factory are 5% without credit.
Composition scheme for restaurants
A restaurant with turnover up to Rs 1.5 crore can opt for composition and pay 5% of turnover. It cannot charge GST to customers and must show "composition taxable person" on its bill of supply. With the regular rate already at 5% without credit, many small restaurants find little difference, but composition reduces return filing.
Restaurant gst rate problems and fixes
| Problem | Fix |
|---|---|
| Charging 18% in a standalone restaurant | Use 5% unless the premises is a specified premises |
| Taking credit on rent or ingredients at 5% | Not allowed under the 5% entry |
| Charging GST again on app orders | The app pays the tax on those orders |
| Service charge left out of taxable value | It is part of the restaurant service |
Restaurant rates here describe the usual position under the services notification. The specified premises test and delivery rules have conditions, so check the current notification on the GST portal and ask a GST practitioner or chartered accountant about your outlet.
Frequently asked questions
What is the GST rate on restaurant food?
5% without input tax credit for most restaurants, including takeaway and delivery. Restaurants in hotels with rooms above Rs 7,500 a day charge 18% with credit.
What is the restaurant hsn code?
Restaurant service is SAC 996331.
What is SAC 996334?
996334 is outdoor catering, at 5% without credit, or 18% at specified premises.
Is service charge taxable in a restaurant bill?
Yes. A service charge forms part of the restaurant supply and is taxed alongside the meal.
Who pays GST on food ordered through an app?
The app operator collects and pays the 5% on restaurant services ordered through it.