Restaurant service is commonly taxed at 5% without ITC, including ordinary dine-in and takeaway supplies. Restaurant service at specified hotel premises can attract 18% with ITC. Catering and event packages require separate classification. Alcoholic liquor for human consumption is outside GST, while food and related services remain within GST.
Use the rule effective on the transaction date
This guide is a decision aid. GST rates, exemptions, valuation rules and portal procedures can change through notifications and circulars. Match the exact supply, HSN or SAC, parties, place of supply and invoice date against the current official material.
Do not file from a headline rate alone. Preserve the notification, classification working and transaction documents supporting the treatment selected.
Modern rate test
The old AC/non-AC distinction is not the correct current framework. Identify restaurant service, specified premises, declared tariff conditions, catering, canteen or another service entry.
Dine-in, takeaway and cloud kitchens
Ordinary preparation and supply of food for consumption can qualify as restaurant service even without conventional seating. Delivery charges and separately supplied goods or services must be reviewed.
1 · IdentifyTransaction facts
2 · ClassifyHSN or SAC
3 · VerifyRate and date
4 · DocumentInvoice and return
Food delivery platforms
For notified restaurant services supplied through an electronic commerce operator, the operator may be liable to pay GST. Restaurants must still evaluate registration, direct sales, turnover and reconciliation obligations.
Service charge and discounts
GST is computed on the taxable transaction value. A restaurant-imposed service charge included in consideration can enter value; it is not itself a government tax. Eligible invoice-linked discounts can reduce value.
Input tax credit
The 5% restaurant entry generally restricts ITC. The 18% specified-premises entry permits credit subject to normal rules. Food, construction, motor vehicle and personal-use restrictions still require analysis.
Compliance checklist
Use the correct GSTIN, SAC, tax rate and tax head; separate alcoholic beverages; reconcile aggregator reports, cancellations and discounts; display invoices transparently; and preserve purchase and sales records.
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Request GST supportFrequently asked questions
What is the GST rate in an ordinary restaurant?
Commonly 5% without ITC.
Do AC restaurants charge 18%?
Not merely because they are air-conditioned.
Is takeaway taxed differently?
Ordinary takeaway restaurant service commonly follows the 5% treatment.
Is service charge the same as GST?
No. It is a separate restaurant charge, although it may enter taxable value.
Is alcohol subject to GST?
Alcoholic liquor for human consumption is outside GST and subject to state levies.
Can a 5% restaurant claim ITC?
The notified entry generally restricts ITC attributable to that supply.
