Home > GST > Help Center > GST on Restaurants Last Updated: Sep 14th 2024
The Goods and Services Tax (GST) is a secondary tax that went into effect on July 1, 2017. Hotel, restaurant, and food business owners all have to pay GST. GST has taken the place of older tax systems like VAT (which was a tax on food) and Service Tax (which was a tax on services). GST will be added to the price of goods and services.
This document covers
Refer GST Registration Thresholds, Exceptions, Examples for state wise GST registration threshold limits.
Refer @ What are the differences between Composition & Regular GST Schemes?
Restaurant services or Food services are of different types. The rate of GST is different for each kind of business setting.
S.No | Particulars | Rate of GST | Applicability of ITC |
---|---|---|---|
1 | Standalone Restaurants including Takeaway (AC/ Non- AC) | 5% | ITC Cannot be claimed by the business |
2 | Food or catering services provided by Indian Railways/IRCTC | 5% | ITC Cannot be claimed by the business |
3 | Outdoor Catering Services or Food Supply Services | 5% | ITC Cannot be claimed by the business |
4 | Food services provided by a restaurant within the hotel (Room Tariff is Less than or equal to 7500) | 5% | ITC Cannot be claimed by the business |
5 | Outdoor Catering within the hotels ((Room Tariff is Less than or equal to 7500) | 5% | ITC Cannot be claimed by the business |
6 | Food services provided by a restaurant within the hotel (Room Tariff is more than 7500) | 18% | ITC can be claimed by the business |
7 | Outdoor Catering within the hotels (Room Tariff is more than 7500) | 18% | ITC can be claimed by the business |
8 | Restaurants serving Alcohol (AC or Non AC) | 18% | ITC can be claimed by the business |
Note: Above rates are applicable if the business is registered under Regular Scheme. If the business registered as composition taxpayer, they are required to pay GST @ 5% without any ITC
GST is also levied on Hotel Services. The rate of GST in hotel services depends on the value of supply i.e., tariff.
S.No | Room Rent | GST Rate (From 01st July 2017 to 30th Sep 2019) | GST Rate (From 01st Oct 2019 to 17th July 2022) | GST Rate w.e.f 18th July 2022 |
---|---|---|---|---|
1 | Rs 1 to Rs 1000 per day | 0% | 0% | 12% |
2 | Rs 1001 to Rs 2500 per day | 12% | 12% | 12% |
3 | Rs 2501 to Rs 7500 | 18% | 12% | 12% |
4 | Above Rs 7500 | 18% | 18% | 18% |
Disclaimer: This article provides an overview and general guidance, not exhaustive for brevity. Please refer Income Tax Act, GST Act, Companies Act and other tax compliance acts, Rules, and Notifications for details.