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GST on Restaurant Services — 5%, 18%, Cloud Kitchen & Catering

Updated: 3 June 2026  |  CGST Act  |  SAC 9963  |  Section 9(5)

Standalone restaurant GST: 5% (no ITC). Restaurant in hotel with room tariff >₹7,500/night: 18% (with ITC). Cloud kitchen: 5% GST. Swiggy/Zomato: aggregator pays 5% as deemed supplier. Outdoor catering: 5% GST. ITC on catering blocked for companies.
5% GST
Standard restaurant rate — covers standalone dine-in, takeaway, delivery, fast food chains, and cloud kitchens.
No ITC at 5% rate. 18% applies to hotel restaurants where room tariff >₹7,500/night — ITC available at 18%. AC vs non-AC: no distinction since 2019.

Restaurant GST Rates — Category Wise

Restaurant TypeGST RateITCNote
Standalone restaurant (dine-in)5%NoAC or non-AC — same rate
Takeaway / home delivery (own)5%No—
Cloud kitchen (online-only)5%NoSection 9(5) if via aggregator
Restaurant in hotel (tariff ≤₹7,500)5%No—
Restaurant in hotel (tariff >₹7,500)18%YesStar hotel restaurants
Ice cream parlour / dessert shop18%YesClassified as food preparation
Outdoor catering (corporate, events)5%No—
Zomato / Swiggy (aggregator)5%NoPays as deemed supplier
Restaurant below ₹20L turnoverNil—Not registered

Frequently Asked Questions

What is the GST rate on restaurant food?
Restaurant GST rates: Standalone restaurants (dine-in, takeaway, delivery): 5% GST (SAC 9963). This applies regardless of AC or non-AC since 2019. Fast food / quick service restaurants (McDonald's, Domino's, Subway): 5% GST. Restaurants inside hotels where room tariff ≤₹7,500/night: 5% GST. Restaurants inside hotels where room tariff >₹7,500/night: 18% GST. Ice cream parlour: 18% GST. Cloud kitchen (online-only): 5% GST as restaurant service. Outdoor catering: 5% GST. All 5% restaurant services: NO Input Tax Credit (ITC) available.
Can a restaurant claim ITC on its purchases?
ITC for restaurants: 5% GST rate restaurant (most restaurants): NO ITC on purchases of raw materials, kitchen equipment, rent, utilities. This is why restaurant rate is 5% — they cannot claim ITC (government gets tax on entire input chain separately). 18% GST restaurant (in hotel >₹7,500 room tariff): CAN claim ITC on all inputs. Financial impact: a restaurant paying 5% but unable to claim ITC on ingredients, rent, equipment may actually pay more effective tax than if it were 18% with full ITC (depends on input tax profile). Mandatory choice: cannot opt for 18% with ITC unless hotel room tariff criterion is met.
How is GST applied on a restaurant bill?
Restaurant bill structure: Food items: 5% GST on food value. Service charge (voluntary, not mandatory): NOT a tax — if charged, 5% GST applies on service charge too. Packaging charges: 5% GST (part of composite supply with food). Delivery charges (if by restaurant): 5% GST. Delivery charges (if by aggregator like Zomato): 18% GST (logistics service). Water/beverages: food rate applies (5%) for plain water; mineral water (packaged): 12% GST. Alcohol: NOT under GST — state taxes + excise duty apply. Bill format: tax must be shown separately on bill/invoice.
What is GST for cloud kitchens and online food delivery?
Cloud kitchens (online-only ghost kitchens): Treated as restaurant services under SAC 9963 — 5% GST. Section 9(5) CGST Act: if orders through Zomato/Swiggy — the aggregator is deemed supplier and pays 5% GST to government. Cloud kitchen does NOT pay GST on these orders — aggregator pays. If cloud kitchen has its own app/website: cloud kitchen pays 5% GST. No ITC: same as regular restaurants — 5% rate means no ITC on purchases. Registration: mandatory if annual turnover > ₹20L. FSSAI: also required separately. Multiple locations: each state needs separate GST registration.
Is GST applicable on outdoor catering and corporate lunch?
Outdoor catering GST: 5% GST (SAC 9963). Applies to: office canteen (managed by caterer), wedding catering, corporate events, office lunch delivery. No ITC for caterer at 5% rate. ITC for company (buyer of catering): BLOCKED under Section 17(5)(b) — companies CANNOT claim ITC on catering services purchased for employees. This is a blocked credit. Exception: hotels, airlines, event organizers who provide catering as part of their own taxable supply (e.g., hotel providing food in event package) can claim ITC. Government canteen: if government body runs canteen — no GST on employees' food.

Related Pages

GST on Restaurant GST on Food Delivery GST on Food GST on Hotels Blocked Credit GST
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