GST on Restaurant Meals: Dine-in, Takeaway & Delivery Compared

Dining out or ordering food is a common part of modern life, but did you know that different types of restaurant services attract different GST rates? Whether you’re eating at a restaurant, taking food away, or ordering online via Zomato or Swiggy, the GST on restaurant meals can vary. In this blog, we break down the GST rates for dine-in, takeaway, and food delivery, helping customers and restaurant owners stay informed and compliant.

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    Is GST Applicable on Restaurant Meals?

    Yes, GST is applicable on restaurant meals, but the rate depends on:

    • The type of service (dine-in, takeaway, delivery)
    • Whether the restaurant has air conditioning
    • Whether it serves alcohol
    • Whether it’s part of a hotel with room tariffs above a threshold

    Understanding these conditions is key to applying the correct GST rate.

    GST Rates for Restaurant Meals

    Service Type GST Rate Conditions
    Dine-in (Non-AC, No Alcohol) 5% (No ITC) Standalone restaurant with basic amenities
    Dine-in (AC/Alcohol Serving) 5% (No ITC) Air-conditioned or alcohol-serving restaurants
    Takeaway 5% (No ITC) Same rate as dine-in restaurants
    Online Delivery (Zomato, Swiggy) 5% (Paid by aggregator) Delivery platforms pay GST instead of restaurants
    Restaurants in Hotels (Room tariff > ₹7500) 18% (With ITC) Fine-dine or luxury restaurants in premium hotels

    Explore related sector-specific GST impacts such as GST on packaging materials used for takeaways.

    Who Collects and Pays GST on Delivery Orders?

    Since January 1, 2022, food delivery platforms like Swiggy and Zomato have been responsible for collecting and paying 5% GST on behalf of the restaurant. Customers won’t see a change in prices, but the liability to pay tax has shifted from the restaurant to the aggregator.

    This change aligns with digital compliance similar to those in digital marketing GST rules.

    HSN/SAC Code for Restaurant Services

    Service SAC Code GST Rate
    Dine-in, Takeaway, Delivery 996331 5% or 18%

    Use correct SAC codes, similar to those discussed in SAC Code listings.

    Input Tax Credit (ITC) for Restaurants

    Under the 5% GST slab, restaurants are not allowed to claim Input Tax Credit. This was introduced to simplify taxation and bring down meal prices. However, restaurants in hotels with room tariffs above ₹7500 per night are allowed to charge 18% GST with ITC benefits.

    If you’re eligible, explore how to benefit from Input Tax Credit under GST.

    Impact on Customers and Restaurants

    For Customers:

    • You generally pay 5% GST on your bill for dine-in, takeaway, or delivery.
    • Transparent pricing helps in better budgeting for meals.

    For Restaurants:

    • Must comply with SAC coding and GST filing.
    • Cannot claim ITC under the 5% regime.
    • Must coordinate with aggregators if listed online.

    Conclusion

    The GST on restaurant meals is mostly standardized at 5%, ensuring simplicity for consumers and small to mid-sized eateries. However, luxury establishments within hotels charge 18% with ITC, making it essential for both customers and business owners to understand which bracket they fall into. Whether dining out, picking up food, or ordering online, knowing the GST structure helps in better transparency and compliance.

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    Chartered Accountant
    MRN No.: 433417
    City: DELHI

    Jagdish Prasad is a Chartered Accountant with over 5 years of experience. He helps people and businesses with GST, income tax, and HSN codes. Jagdish makes sure his clients follow all tax rules and save money the right way. He also enjoys writing simple articles to help others understand taxes and stay updated with the latest rules.

    Frequently Asked Questions (FAQs)

    • What is the GST on restaurant meals in India?
      Most restaurant meals are taxed at 5% GST without ITC. Fine-dining restaurants in hotels with expensive rooms may charge 18% with ITC.
    • Is there a difference in GST for dine-in vs takeaway?
      No, both are generally taxed at 5% without ITC.
    • Who pays the GST for online food delivery?
      Platforms like Zomato or Swiggy collect and pay 5% GST directly to the government.
    • Can restaurants claim ITC on food inputs?
      No, not under the 5% GST regime. Only 18% restaurants in luxury hotels can claim ITC.
    • What SAC code is used for restaurant services?
      996331 is the SAC code for restaurant and catering services.
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