Restaurant GST Rate — 5% vs 18%, ITC Rules & All Categories

Updated: 3 June 2026 | CGST Act 2017 | Notification 11/2017-CT(Rate) as amended up to June 2026

Most restaurants in India charge 5% GST with no Input Tax Credit (ITC) — standalone restaurants, dhabas, fast food outlets, and AC restaurants all fall in this category. 18% GST with ITC applies only to restaurants inside hotels where the declared room tariff exceeds ₹7,500 per night. Food ordered via Zomato or Swiggy carries 5% GST, paid by the aggregator platform since January 2022 under Section 9(5) CGST Act.

5% GST

Standard rate for 95%+ of restaurants in India — no ITC, no AC/non-AC split
AC vs non-AC distinction was removed in July 2019. Single 5% (no ITC) applies to all standalone restaurants regardless of air conditioning.

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Key change in July 2019: Before July 2019, AC restaurants paid 18% GST (with ITC) and non-AC paid 12% (no ITC). The GST Council simplified this to a flat 5% (no ITC) for all restaurants from July 2019 onwards. Only hotel restaurants with room tariff above ₹7,500/night remained at 18% with ITC.

Restaurant GST Rate Table — All Categories

Restaurant Type	GST Rate	ITC Available?	Notes
Standalone restaurant / dhaba / fast food	5%	No ITC	Most common category in India
AC restaurant (standalone, no hotel)	5%	No ITC	AC/non-AC distinction removed Jul 2019
Restaurant in hotel — room tariff ≤₹7,500/night	5%	No ITC	Budget & mid-range hotel restaurants
Restaurant in hotel — room tariff >₹7,500/night	18%	ITC Allowed	Luxury / 5-star hotel restaurants
Outdoor catering (events, offices, weddings)	5%	No ITC	Food supplied at customer's premises
Ice cream parlour	18%	ITC Allowed	Ice cream classified as manufactured good
Takeaway from restaurant	5%	No ITC	Same rate as dine-in for the restaurant
Food delivery via Zomato / Swiggy	5%	No ITC	Aggregator is deemed supplier — Section 9(5) CGST

Zomato & Swiggy GST — Section 9(5) CGST Act

From 1 January 2022, food delivery aggregators are deemed suppliers under Section 9(5) of the CGST Act:

The aggregator (Zomato/Swiggy) collects and pays 5% GST on all food orders routed through the platform
The restaurant itself does not charge or remit GST on platform-routed orders
Direct orders (phone, walk-in) remain taxed under the restaurant's own GST registration
This change brought unregistered small restaurants (below ₹20L threshold) into the GST net via the platform

GST registration threshold for restaurants: Annual turnover below ₹20 lakh (₹10 lakh in special category states) — no GST registration required, no GST charged on bills. Above the threshold, registration is mandatory and 5% GST must be collected and remitted monthly via GSTR-3B, with invoice details reported in GSTR-1.

Frequently Asked Questions

When is restaurant GST 5% and when is it 18%?

The vast majority of restaurants charge 5% GST with no Input Tax Credit (ITC). This applies to standalone restaurants, fast food outlets, dhabas, and AC restaurants. 18% GST applies only to restaurants located inside hotels where the room tariff exceeds ₹7,500 per night — in this case the restaurant can also claim ITC. The AC vs non-AC distinction was removed in July 2019. Ice cream parlours attract 18% GST because ice cream is a manufactured good, not a food service.

What GST rate applies to restaurants inside hotels?

It depends on the hotel room tariff. If the hotel charges ₹7,500 or less per night: restaurant GST is 5% (no ITC). If the hotel charges more than ₹7,500 per night: restaurant GST is 18% (with ITC allowed). This rule applies to the declared tariff or transaction value, whichever is higher. So a budget hotel restaurant pays 5%, while a five-star hotel restaurant pays 18%.

Is GST charged on takeaway and home delivery via Zomato or Swiggy?

Yes. Food ordered via Zomato or Swiggy attracts 5% GST. Since January 2022, food aggregators like Swiggy and Zomato are treated as deemed suppliers under Section 9(5) of the CGST Act — meaning the platform pays and collects the 5% GST, not the individual restaurant. For direct takeaway from a restaurant, the restaurant charges 5% GST if GST-registered. Restaurants below the ₹20L turnover threshold are exempt and charge no GST.

What is the GST rate on outdoor catering?

Outdoor catering services — food served at office events, weddings, parties, and corporate functions at a location other than the restaurant premises — attract 5% GST with no ITC. This applies whether the caterer is a restaurant business or a standalone catering service. If the caterer is part of a hotel where room tariff exceeds ₹7,500, the rate may be 18%. Outdoor catering is different from banquet hall services, which may have different applicable rates.

Can restaurants claim ITC on their purchases under GST?

Most restaurants operating at 5% GST cannot claim Input Tax Credit (ITC). This is a deliberate trade-off — lower rate to customers, but GST paid on ingredients, kitchen equipment, and services is absorbed as a cost. Restaurants in hotels with room tariff above ₹7,500 (charging 18% GST) are allowed to claim ITC on their business inputs. For restaurant owners on the 5% scheme, the GST paid on supplies flows into the menu price as an embedded cost.

GST Registration GST Return Filing GST on Hotel Services How to Claim ITC GST Rates — All Items GST on Catering Services

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