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Home > GST > Help Center > GST on Restaurants Last Updated: Nov 13th 2023

GST on Restaurants, Hotels, and Food

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

  1. Threshold of Registration for Restaurants or Hotels
  2. Rate of GST on Restaurant Services
  3. Rate of GST for Hotel Services


1. Threshold of Registration for Restaurants or Hotels

2. Rate of GST on Restaurant Services

Restaurant services or Food services are of different types. The rate of GST is different for each kind of business setting.

S.NoParticularsRate of GSTApplicability of ITC
1Standalone Restaurants including Takeaway (AC/ Non- AC)5%ITC Cannot be claimed by the business
2Food or catering services provided by Indian Railways/IRCTC5%ITC Cannot be claimed by the business
3Outdoor Catering Services or Food Supply Services5%ITC Cannot be claimed by the business
4Food 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
5Outdoor Catering within the hotels ((Room Tariff is Less than or equal to 7500)5%ITC Cannot be claimed by the business
6Food services provided by a restaurant within the hotel (Room Tariff is more than 7500)18%ITC can be claimed by the business
7Outdoor Catering within the hotels (Room Tariff is more than 7500)18%ITC can be claimed by the business
8Restaurants 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

3. Rate of GST for Hotel Services

GST is also levied on Hotel Services. The rate of GST in hotel services depends on the value of supply i.e., tariff.

S.NoRoom RentGST Rate
1Rs 1 to Rs 1000 per day12%
2Rs 1001 to Rs 7500 per day12%
3More than Rs 7501 per day18%

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