New GST for Food Business and Restaurants: Tax Rate on Dine-In and Takeaway
Quick Summary
- The new GST rate for dine-in and takeaway from restaurants in India is 5%, with no input tax credit (ITC) allowed.
- Food delivery services like Zomato and Swiggy charge a 5% GST, which is collected by the aggregator.
- Food served in 5-star hotels and outdoor catering services are taxed at 18%, with ITC allowed.
- Branded and packaged snacks are taxed at either 5% or 18%, depending on processing and branding.
- The 12% GST slab is discontinued, with most items moving to a 5% rate, while premium items may be taxed at 18%.
Running a restaurant, café, cloud kitchen, or any kind of food business? Then knowing the correct GST rates and tax structure is crucial for pricing, billing, and compliance. Whether it’s dine-in, takeaway, or home delivery, the GST rates differ based on how food is served and where it’s sold from.
Let’s explore the complete GST framework for the food business in India.
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GST on Food Businesses & Restaurants in India
Food businesses such as restaurants, cloud kitchens, food delivery services, and catering companies fall under specific GST categories depending on the type of service they provide.
Under the GST rate rationalisation effective after 22 September 2025, the 12% GST slab has largely been removed, with many items moving to 5% or 18%. Most restaurants continue to charge 5% GST without Input Tax Credit (ITC), while outdoor catering and certain hotel restaurants charge 18% GST with ITC.
New GST Rate for Food Businesses & Restaurants
| Type of Food Service | GST Rate (After 22 Sept 2025) |
GST Rate (Before 22 Sept 2025) |
ITC Available |
|---|---|---|---|
| Dine-in at restaurant | 5% | 5% | No |
| Takeaway from restaurant | 5% | 5% | No |
| Food delivery via Zomato / Swiggy | 5% | 5% | No |
| Food served in 5-star hotel | 18% | 18% | Yes |
| Outdoor catering services | 18% | 18% | Yes |
(After 22 Sept 2025) 5%
(Before 22 Sept 2025) 5%
(After 22 Sept 2025) 5%
(Before 22 Sept 2025) 5%
(After 22 Sept 2025) 5%
(Before 22 Sept 2025) 5%
(After 22 Sept 2025) 18%
(Before 22 Sept 2025) 18%
(After 22 Sept 2025) 18%
(Before 22 Sept 2025) 18%
GST on Dine-In, Takeaway & Room Service
| Service Type | GST Rate (After 22 Sept 2025) |
ITC Available |
|---|---|---|
| Dine-in orders | 5% | No |
| Takeaway orders | 5% | No |
| Room service (non-specified premises) | 5% | No |
Businesses charging 5% cannot claim ITC on inputs like ingredients, packaging, utilities, etc.
(After 22 Sept 2025) 5%
(After 22 Sept 2025) 5%
(After 22 Sept 2025) 5%
GST on Outdoor Catering
| Catering Service | GST Rate | ITC Available |
|---|---|---|
| Wedding / event catering | 18% | Yes |
| Industrial / commercial food services | 18% | Yes |
For composite contracts, businesses must determine the principal supply to apply the correct GST rate.
GST on Packaged Food Products
| Packaged Food Product | GST Rate (After 22 Sept 2025) |
GST Rate (Before 22 Sept 2025) |
|---|---|---|
| Branded / packaged snacks | 5% or 18% | 12% or 18% |
| Namkeen, chips, bakery items | 5% or 18% | 5% – 18% |
| Non-alcoholic beverages | 18% (most) | 12% – 28% |
(After 22 Sept 2025) 5% or 18%
(Before 22 Sept 2025) 12% or 18%
(After 22 Sept 2025) 5% or 18%
(Before 22 Sept 2025) 5% – 18%
(After 22 Sept 2025) 18% (most)
(Before 22 Sept 2025) 12% – 28%
How to Calculate GST for Food Businesses
GST for restaurants and food services is calculated based on the value of the food bill and applicable GST rate.
GST Calculation Formula
GST Amount = Bill Amount × GST Rate
Final Amount = Bill Amount + GST
Example 1: Restaurant Dine-In Bill
- Food bill: ₹1,000
- GST rate: 5%
GST = ₹1,000 × 5% = ₹50
Total bill = ₹1,050
Example 2: Outdoor Catering Service
- Catering service charge: ₹50,000
- GST rate: 18%
GST = ₹50,000 × 18% = ₹9,000
Total invoice = ₹59,000
Businesses charging 18% GST can claim Input Tax Credit (ITC) on purchases such as ingredients, kitchen equipment, and services used for catering.
