Getting the GST rate for restaurants right is the difference between clean books and a nasty notice at assessment time. Most standalone restaurants in India charge a single, simple rate, but the moment you sit inside a hotel, sell packaged goods, or run a cloud kitchen through Swiggy and Zomato, the picture changes. This 2026 guide breaks down what rate applies where, and how the tax splits into CGST and SGST on your bill.
The standard 5% rate for standalone restaurants
Most standalone restaurants — dine-in, takeaway, and delivery — charge 5% GST (2.5% CGST + 2.5% SGST) on food and beverages. The trade-off is that you cannot claim input tax credit (ITC) on your purchases, rent, or equipment. That means the GST you pay to suppliers becomes a cost, not something you can set off against the tax you collect.
This 5%-without-ITC structure applies whether the customer eats in, picks up, or orders online. It keeps billing simple, but it also means your purchase-side GST quietly increases your food cost, so pricing your menu correctly matters.
When 18% GST applies
Restaurants located inside hotels where the declared room tariff is at or above the specified threshold attract 18% GST with input tax credit. In this case you can claim ITC on eligible inputs, which partly offsets the higher headline rate. The exact tariff threshold that triggers the 18% slab has changed over the years, so verify the current threshold on the GST portal (gst.gov.in) or with your CA before you fix your billing rate.
Alcohol is a separate matter: liquor is outside GST and continues to attract state VAT/excise. Keep alcohol billing on a distinct line so your GST returns stay clean.
What about packaged food and bakery items?
If you sell pre-packaged and labelled items — bottled drinks, packaged snacks, or branded goods — these may carry their own GST rates (often 12% or 18%) rather than the 5% restaurant rate. Prepared food served or delivered from your kitchen is different from sealed retail products. A recipe-aware POS makes this separation automatic instead of manual guesswork.
How CGST and SGST appear on the bill
For intra-state sales — which is virtually every restaurant transaction — the total GST splits equally into CGST (central) and SGST (state). So a 5% rate shows as 2.5% CGST + 2.5% SGST, and 18% shows as 9% + 9%. Your printed bill must display your GSTIN, the taxable value, and both components separately. Clean, compliant bills reduce disputes with customers and make GST billing at return time far easier.
Swiggy, Zomato and the ECO rule
Food delivery platforms are treated as e-commerce operators (ECOs). Under current rules, the platform is responsible for collecting and paying GST on restaurant services supplied through it. That does not remove your own compliance duties — you still record these sales, reconcile platform statements, and report them correctly. Reconciliation errors between app payouts and your own records are one of the most common sources of mismatch, so automate it wherever possible.
- Standalone restaurant: 5% GST, no ITC.
- Restaurant in qualifying hotel: 18% GST, with ITC (verify the tariff threshold).
- Packaged/labelled goods: product-specific rates, not the 5% food rate.
- Delivery apps: platform collects GST as the ECO; you still reconcile.
Keeping rates right at scale
If you run more than one outlet, rate discipline gets harder — different states, different item mixes, and different billing staff. A system that enforces the correct rate per item and per outlet prevents small errors from compounding into large liabilities. Explore how multi-outlet management keeps tax settings consistent, and pair it with a restaurant POS that applies the right GST rate automatically on every bill.
Rates, slabs, and thresholds are updated by the GST Council from time to time. Treat this guide as a working overview and always confirm the exact numbers that apply to your business with your CA or on the official portal before you set them in your billing system.
Frequently asked questions
What is the GST rate for restaurants in India?
Most standalone restaurants charge 5% GST (2.5% CGST + 2.5% SGST) without input tax credit. Restaurants inside hotels with a declared room tariff at or above the specified threshold attract 18% with ITC. Confirm current figures on gst.gov.in or with your CA.
Can restaurants claim input tax credit?
Standalone restaurants on the 5% rate cannot claim ITC. Only restaurants charging 18% (typically those in qualifying hotels) can claim input tax credit on eligible purchases.
Who pays GST on Swiggy and Zomato orders?
Delivery platforms are treated as e-commerce operators and are responsible for collecting and paying GST on restaurant services supplied through them. You still record the sales and reconcile platform payouts against your books.
Is GST charged on alcohol served in restaurants?
No. Alcohol is outside GST and attracts state VAT or excise instead. Bill it on a separate line so your GST returns remain accurate.
