GST for Food Business and Restaurants: Tax Rate on Dine-In and Takeaway
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 Rates for Food Business – At a Glance
| Type of Food Service | GST Rate | Input Tax Credit (ITC) | Remarks |
|---|---|---|---|
| Dine-in at restaurant | 5% | Not allowed | In air-conditioned or non-AC |
| Takeaway from restaurant | 5% | Not allowed | Same as dine-in |
| Food delivery via Zomato/Swiggy | 5% | Not allowed | GST collected by aggregator |
| Food served in 5-star hotel | 18% | Allowed | If declared tariff ≥ ₹7,500 |
| Outdoor catering services | 18% | Allowed | GST with ITC allowed |
GST on Dine-In and Takeaway Orders
| Service Type | GST Rate | ITC Available? |
|---|---|---|
| Dine-in | 5% | No |
| Takeaway | 5% | No |
| Room service | 5% | No |
Businesses charging 5% cannot claim input tax credit on ingredients, packaging, or utilities.
GST for Outdoor Catering
| Service | GST Rate | ITC Available? |
|---|---|---|
| Wedding/Event catering | 18% | Yes |
| Industrial/commercial food service | 18% | Yes |
GST on Packaged Food
| Product | GST Rate |
|---|---|
| Branded/packaged snacks | 12% or 18% |
| Namkeen, chips, bakery items | 5% to 18% |
| Beverages (non-alcoholic) | 12% to 28% |
Understanding the gst for food business and restaurants is key for correct billing, profitability, and compliance. Whether you’re managing a restaurant, a food truck, or an online kitchen, applying the right GST slab helps keep your business transparent and competitive.
As a Chartered Accountant with over 12 years of experience, I am not only skilled in my profession but also passionate about writing. I specialize in producing insightful content on topics like GST, accounts payable, and income tax, confidently delivering valuable information that engages and informs my audience.
Frequently Asked Questions (FAQs)
- What is the GST on food business in India?Mostly 5% without ITC for restaurants and takeaways. 18% with ITC for outdoor catering or high-end hotels.
- Do food delivery services charge GST?Yes, platforms like Zomato and Swiggy collect 5% GST on all food orders and pay it to the government.
- Can restaurants claim input tax credit on food items?No. If charging 5%, they cannot claim ITC. Only food businesses charging 18% (like caterers) can.
- What’s the GST for packaged snacks in a restaurant?Depends on product: 5%, 12%, or 18%, based on type and branding.
- How has GST impacted the food industry?It has simplified rates, but removal of ITC at 5% slab has increased costs for small to mid-level restaurants.
