New GST for Restaurants in India: Everything You Need to Know
- The GST rate for most restaurant services in India is 5% without Input Tax Credit (ITC). Restaurant services supplied by hotels with applicable room tariff conditions may attract 18% GST with ITC as per applicable GST provisions.
- Restaurant services, including eligible standalone restaurant and takeaway supplies, generally attract 5% GST without ITC under the applicable GST category.
- Catering services attract GST based on their applicable classification and conditions of supply.
- Restaurant services are classified under SAC 9963 for GST purposes, with specific codes applicable to different service categories.
- Alcoholic liquor for human consumption is outside the GST framework. Packaged food and non-alcoholic beverages attract GST based on their applicable HSN classification, product category, and GST provisions.
Eating out or ordering food online is a big part of life in modern India. But have you ever checked your restaurant bill and wondered what that extra tax is? That’s GST added to your food bill. In this article, we’ll explain how GST applies to restaurants, whether dining in, ordering online, or even catering services. We’ll also discuss restaurant HSN code and gst rate, and input tax credit eligibility.
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New GST Rate on Restaurant Food in India
The Government of India has updated the GST framework applicable to restaurant and catering services effective 22nd September 2025. GST on restaurant services continues to depend on the establishment type and whether the premises fall within the specified hotel category.
The new gst rate on hotel and restaurant services depends on the type of establishment and applicable GST conditions. Regular restaurants generally attract 5% GST without ITC, while restaurants in specified hotel premises may attract 18% GST with ITC.
GST on Restaurant and Catering Services
| Type of Restaurant / Service | GST Rate (After 22nd Sept 2025) |
GST Rate (Before 22nd Sept 2025) |
Input Tax Credit (ITC) |
|---|---|---|---|
| Non AC Restaurants | 5% | 5% | No |
| AC Restaurants | 5% | 5% | No |
| Takeaway Services (AC or Non AC) | 5% | 5% | No |
| Outdoor Catering Services (standalone) | 5% | 18% | No |
| Outdoor Catering at specified premises | 18% | 18% | Yes |
| Restaurants in hotels with room tariff above ₹7,500 | 18% | 18% | Yes |
Type of Restaurant / Service
GST Rate
(After 22nd Sept 2025)
GST Rate
(Before 22nd Sept 2025)
Input Tax Credit
(ITC)
Type of Restaurant / Service
GST Rate
(After 22nd Sept 2025)
GST Rate
(Before 22nd Sept 2025)
Input Tax Credit
(ITC)
Type of Restaurant / Service
GST Rate
(After 22nd Sept 2025)
GST Rate
(Before 22nd Sept 2025)
Input Tax Credit
(ITC)
Type of Restaurant / Service
GST Rate
(After 22nd Sept 2025)
GST Rate
(Before 22nd Sept 2025)
Input Tax Credit
(ITC)
Type of Restaurant / Service
GST Rate
(After 22nd Sept 2025)
GST Rate
(Before 22nd Sept 2025)
Input Tax Credit
(ITC)
Type of Restaurant / Service
GST Rate
(After 22nd Sept 2025)
GST Rate
(Before 22nd Sept 2025)
Input Tax Credit
(ITC)
Important Clarification
Specified premises refer to hotels where the declared room tariff of any room exceeds ₹7,500 per night. In such cases, restaurant and catering services provided within those premises attract 18% GST with Input Tax Credit.
In all other regular restaurant cases, GST is charged at 5% without Input Tax Credit.
What This Means for Customers
If you dine at a regular restaurant, whether air conditioned or not, GST remains at 5%.
If you order takeaway from a restaurant, GST is also 5%.
If catering services are provided at a hotel classified as a specified premise, GST is charged at 18% with Input Tax Credit available to the service provider..
SAC Code for Restaurant Services
Restaurant and catering services are classified under SAC 9963. The new gst rate on hotel and restaurant services depends on the type of establishment and applicable GST conditions.
Businesses searching for restaurant service hsn code should note that restaurant services use SAC classification for GST purposes.
| Restaurant services | 996331 | 5% without ITC / 18% with ITC where applicable |
|---|---|---|
| Outdoor catering services | 996333 | 5% or 18% depending on the nature of service and applicable GST conditions |
Restaurant services
996331
5% without ITC / 18% with ITC where applicable
These SAC codes are used on invoices and GST returns for proper classification and compliance.
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Input Tax Credit (ITC): Who Can Claim It?
Restaurants:
- Most restaurants (except 5-star hotel restaurants and catering services) cannot claim ITC.
- This was done to keep food affordable and avoid complex ITC structures for small restaurant owners.
Businesses:
- If your company hires a catering service for a corporate event or employee meals, you may be able to claim ITC , provided you meet the conditions under GST law.
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GST on Restaurant Food vs GST on Services
- Food served in a restaurant (prepared and supplied as part of restaurant service): 5% GST without ITC, subject to applicable conditions.
- Packaged food sold in a restaurant (such as bottled water, chips, and other packaged items): GST depends on the applicable HSN classification and product category.
- Beverages like soft drinks and other non-alcoholic drinks: GST depends on the specific product classification and applicable GST rate. Alcoholic liquor for human consumption is outside the GST framework.
Businesses selling food items separately should verify the applicable restaurant food hsn code and gst rate based on the product classification.
How to Calculate GST on Restaurant Bills
GST on restaurant services is calculated on the total food and beverage value before adding GST.
Example 1: Regular Restaurant at 5% GST
If your food bill is ₹2,000:
GST = 5% of ₹2,000
GST = ₹100
Total payable amount = ₹2,100
There is no Input Tax Credit benefit to the restaurant in this case.
Example 2: Restaurant in Specified Hotel at 18% GST
If you dine at a restaurant located in a hotel where the room tariff exceeds ₹7,500 and your bill is ₹2,000:
GST = 18% of ₹2,000
GST = ₹360
Total payable amount = ₹2,360
In this case, the restaurant can claim Input Tax Credit.
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- Multiple outlet management with centralized control.
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Final Thoughts
Whether you are dining at a restaurant, ordering food online, or booking catering for a party, GST depends on the nature of supply and applicable GST conditions. Most restaurant services attract 5% GST without ITC, while restaurant services supplied in specified hotel premises and certain catering services may attract 18% GST with ITC.
Understanding these GST categories helps businesses and customers identify the applicable tax treatment on restaurant bills.
