GST and VAT on restaurant bills in India
Most restaurants in India charge 5% GST on food and non-alcoholic drinks (2.5% CGST plus 2.5% SGST) and cannot claim input tax credit. Restaurants inside hotels where a room was charged above ₹7,500 a night in the previous financial year charge 18% with input tax credit. Alcoholic drinks are outside GST: the state's VAT applies instead, so a restaurant that serves liquor bills it separately from food.
Updated
- 5% GST for most restaurants
- 18% in specified hotels
- Liquor on state VAT
- What a bill must show
Which GST rate applies to a restaurant?
The rate depends on where the restaurant is and how it is registered, not on what is on the menu.
| Restaurant | GST | Input tax credit |
|---|---|---|
| Standalone restaurant, café, dhaba or bar: dine-in, takeaway or own delivery | 5% (2.5% CGST + 2.5% SGST) | Not available |
| Restaurant in a hotel that charged above ₹7,500 a night for a room in the previous financial year, or that has opted in | 18% (9% CGST + 9% SGST) | Available |
| Food ordered through Swiggy, Zomato or another food app | 5%, collected and paid by the app | Not available |
| Restaurant under the composition scheme | 5% of turnover, paid by the restaurant | Not available; no GST charged on the bill |
How is liquor taxed on a restaurant bill?
Alcoholic liquor for human consumption is outside GST under the Constitution. States tax its sale through VAT or sales tax, at rates that differ from state to state, and a bar needs a state VAT registration (a TIN) alongside its GSTIN.
In practice, food and soft drinks carry GST and liquor carries VAT. Some restaurants issue two bills; others issue one invoice with separate GST and VAT sections and both registration numbers. Ask your accountant which your state and your auditors expect.
What must a restaurant's GST bill show?
A tax invoice under GST rules carries:
- The restaurant's name, address and GSTIN.
- A serial number of up to 16 characters, unique for the financial year. Letters, digits, hyphens and slashes are allowed, and a restaurant may run more than one series.
- The date of issue.
- A description of what was served, with the SAC for restaurant services, 996331.
- The taxable value, the GST rate, and the CGST and SGST amounts (IGST where it applies).
- The customer's name and address only when the customer is GST-registered, or the bill is ₹50,000 or more.
What changes under the composition scheme?
A restaurant with a turnover of up to ₹1.5 crore can opt for the composition scheme and pay 5% of its turnover as GST. It cannot add GST to the customer's bill and cannot claim input tax credit, and it issues a bill of supply instead of a tax invoice. It is simpler to file, but the restaurant carries the tax itself.
Who pays GST on Swiggy and Zomato orders?
Since 1 January 2022, the food delivery app collects and pays the 5% GST on food it delivers. The restaurant does not charge GST again on those orders, but it still reports them in its returns.
How IntelixServe applies these rules
IntelixServe is a restaurant POS built for this split:
- Tax rates are set once by the owner. A new restaurant starts with GST 5%, GST 18%, Nil and VAT 20%, and each can be edited to match your registration and your state.
- Food and beverage bills carry your GSTIN and the CGST/SGST split; liquor bills carry your TIN and VAT. Or one combined invoice shows both blocks.
- Bill numbers run per financial year, with your own prefix and padding, in one shared series or one per bill type, for example MV1/F/26-27/0001.
- Reports split food, beverage and liquor sales, and the department-wise report shows tax per item.
This guide summarises Indian GST and VAT rules for restaurants as of the date above, for general information. Rates, thresholds and state VAT change; confirm how they apply to your restaurant with your chartered accountant.
Questions
What is the GST rate on restaurant food in India?
5% (2.5% CGST and 2.5% SGST) without input tax credit for most restaurants. Restaurants in hotels that charged above ₹7,500 a night for a room in the previous financial year charge 18% with input tax credit.
Is GST charged on alcohol in a restaurant?
No. Alcoholic liquor for human consumption is outside GST. The state's VAT applies to it, at a rate set by each state.
Can a restaurant claim input tax credit?
Not at the 5% rate. Input tax credit is available to restaurants in specified hotel premises, which charge 18%.
What is the SAC code for restaurant services?
996331, for services provided by restaurants, cafés and similar eating places, including takeaway and delivery.
Does a restaurant charge GST on Swiggy and Zomato orders?
No. Since 1 January 2022 the delivery app collects and pays the 5% GST on food it delivers.
Can bill numbers continue from an old billing system?
Yes, as long as each number is unique for the financial year and at most 16 characters. In IntelixServe the owner sets the prefix, padding and next number for each series.
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