The GST rate on restaurant food in India is 5% without Input Tax Credit (ITC) for most establishments. This includes standalone restaurants, cafés, cloud kitchens, and takeaway services, whether they are air-conditioned or non-air-conditioned.
Restaurants located inside hotels classified as specified premises are an exception. They charge 18% GST and can claim ITC. Alcohol is not covered under GST. It is taxed separately under state VAT and excise laws.
These rates took effect under the GST 2.0 reforms on 22 September 2025. The reforms also moved many packaged food items from the 12% and 18% tax slabs to 5% or nil GST. Sugary and carbonated drinks now attract a 40% demerit tax.
GST Rates for Food Items
The GST 2.0 reforms, effective 22 September 2025, reduced GST rates on many food items. The table below compares the GST rates on major food items before and after the GST 2.0 reforms:
| Food Category | Before Sept 2025 | From Sept 2025 |
|---|---|---|
| Unpackaged staples, fresh fruits and vegetables, eggs, milk, salt, basic rotis | Nil | Nil |
| UHT milk, pre-packaged paneer, pizza bread, khakhra, chapati | 5% | Nil |
| Paratha, parotta, and similar Indian breads | 18% | Nil |
| Condensed milk, butter, cheese, dairy fats | 12% | 5% |
| Dried nuts and fruits | 12% | 5% |
| Animal and marine fats | 12% | 5% |
| Refined sugar, confectionery, pasta, extruded snacks | 12% | 5% |
| Preserved vegetables, jams, jellies | 12% | 5% |
| Fruit and vegetable juices, pre-packaged tender coconut water | 12% | 5% |
| Coffee, tea, and malt extracts | 18% | 5% |
| Cocoa products (chocolate, cocoa butter, cocoa powder) | 18% | 5% |
| Sugary and flavoured beverages | 18%/28% + cess | 40% |
Note: These GST rates apply to packaged food products sold as goods. They do not apply to restaurant services, which follow separate GST rules.
GST Categories: Who Can Claim ITC?
Restaurant GST mainly depends on whether the business can claim Input Tax Credit (ITC). Most restaurants charge 5% GST and cannot claim ITC. Only a few categories charge 18% GST and are eligible for ITC.
The table below shows the GST rate and ITC eligibility for different types of restaurant services:
| Category | GST Rate | ITC Available? |
|---|---|---|
| Standalone restaurants (AC or non-AC) | 5% | No |
| Takeaway orders | 5% | No |
| Food ordered through delivery apps | 5% | No |
| Restaurants in hotels with room tariff below ₹7,500 | 5% | No |
| Restaurants in hotels classified as specified premises | 18% | Yes |
| Outdoor catering by a standalone caterer | 5% | No |
| Catering provided through specified premises | 18% | Yes |
| Food or catering by Indian Railways/IRCTC | 5% | No |
| Catering in hotels with room tariff below ₹7,500 | 5% | No |
| Delivery platform service fee (Swiggy, Zomato, etc.) | 18% | Yes (for the platform) |
Most restaurant services fall under the 5% GST category without ITC. The 18% GST rate mainly applies to restaurants in specified premises and the service fees charged by delivery platforms.
Composite vs Regular GST Scheme for Restaurants
Restaurants can choose between the Composite Scheme and the Regular Scheme, depending on their turnover and business needs.
The table below compares the key features of the Composite and Regular GST schemes for restaurants:
| Feature | Composite Scheme | Regular Scheme |
|---|---|---|
| Eligibility | Up to ₹1.5 crore turnover (₹75 lakh in special category states) | No turnover limit |
| GST Rate | 5% on turnover | 5% without ITC or 18% with ITC |
| Input Tax Credit (ITC) | Not available | Available where applicable |
| Inter-state sales | Not allowed | Allowed |
| Sales through e-commerce | Not allowed | Allowed |
| Collect GST from customers | No | Yes |
| GST returns | CMP-08 (Quarterly) and GSTR-4 (Annual) | Regular monthly or quarterly returns |
| GST payment | Paid by the business | Collected from customers |
The Composite Scheme is meant for small restaurants with annual turnover up to ₹1.5 crore. It offers simpler compliance but does not allow ITC.
The Regular Scheme has no turnover limit. Restaurants under this scheme generally charge 5% GST without ITC or 18% GST with ITC, where applicable, such as restaurants in specified premises.
GST on Takeaway and Delivery Orders
GST rules for food delivery platforms are different from those for restaurants. Under Section 9(5) of the CGST Act, platforms like Swiggy and Zomato collect and deposit GST on restaurant food orders.
For most restaurants, takeaway and home delivery attract 5% GST without ITC, just like dine-in orders.
Here are the key points:
- Food ordered through delivery apps is taxed at 5% GST.
- The platform’s delivery fee is taxed separately at 18% GST (effective September 2025).
- Packaged food products sold through these apps follow their own GST rates, which may be nil, 5%, or higher, depending on the item.
- Delivery platforms collect GST from customers and pay it to the government. They do not keep the tax.
Service Charge vs GST on Restaurant Bills
Service charge and GST are different. GST is a government tax, while the restaurant decides whether to charge a service charge. The table below compares the two:
| Aspect | GST | Service Charge |
|---|---|---|
| Nature | Government tax | Restaurant charge |
| Who receives it? | Government | Restaurant |
| Typical rate | 5% or 18% | Usually 5%–10% |
| Mandatory? | Yes, if applicable | No |
| Can customers refuse it? | No | Yes |
Knowing the difference helps customers understand their bills. It also helps restaurants bill correctly and stay GST-compliant.
