GST on restaurants: rates, ITC and food delivery apps in 2026
Most restaurant bills in India carry 5 percent GST, and the restaurant cannot claim input tax credit on what it buys. The exceptions are restaurants inside hotels charging more than ₹7,500 a night for a room, and the rules shift again when the order comes through Swiggy or Zomato.
Reviewed by Vijay Dhawan, Managing Partner, LexVerge LLP · Published
Quick answer
Most restaurants charge 5% GST without input tax credit, including AC restaurants, takeaway and cloud kitchens. Restaurants in hotels that supplied any room above ₹7,500 a night charge 18% with credit. On Swiggy and Zomato orders, the app pays the 5% GST under section 9(5).
- Composition: 5% of turnover up to ₹1.5 crore
- App commission carries 18% GST, not creditable
- Hotel rooms up to ₹7,500: 5% without ITC
Rates at a glance
| Supply | GST | Input tax credit |
|---|---|---|
| Standalone restaurant, dine-in or takeaway, AC or non-AC | 5% | Not allowed |
| Restaurant in a hotel where any room was supplied above ₹7,500 a night in the previous year (“specified premises”) | 18% | Allowed |
| Restaurant in a hotel with all rooms at ₹7,500 or less | 5% | Not allowed |
| Cloud kitchen or takeaway counter | 5% | Not allowed |
| Food ordered through an e-commerce app | 5%, paid by the app | Not allowed |
| Outdoor catering at a venue | 5% (18% with ITC at specified premises) | As per the rate |
| Restaurant under the composition scheme | 5% of turnover, no GST charged to customer | Not allowed |
Hotel accommodation itself is 5% without ITC up to ₹7,500 a night and 18% with ITC above, following the September 2025 rate changes.
Why no input tax credit?
The 5% rate is a concessional rate available only on the condition that ITC on inputs and input services is not claimed. So GST paid on rent, ingredients, kitchen equipment, marketing and software becomes a cost. A restaurant with high rent in a mall can end up bearing more GST than it collects on thin-margin items. There is no option for a standalone restaurant to choose 18% with ITC; only hotels meeting the specified premises test get that treatment. Background on how ITC normally works is in our input tax credit guide.
Swiggy, Zomato and other apps
- Since 1 January 2022, the e-commerce operator collects and pays the 5% GST on restaurant services supplied through it, under section 9(5) of the CGST Act. The restaurant does not pay GST again on those orders.
- The restaurant still reports these sales in GSTR-1 and GSTR-3B as supplies on which the operator paid tax, so turnover and tax reconcile.
- The app’s own commission and platform fees charged to the restaurant attract 18% GST, and since the restaurant cannot claim ITC, it is a cost.
- Delivery and platform charges billed by the app to customers are the app’s own supplies and carry GST separately on the customer’s bill.
- The operator also deducts TCS on the net value of taxable supplies other than restaurant services.
Composition scheme for small restaurants
A restaurant with aggregate turnover up to ₹1.5 crore (₹75 lakh in some special category states) can opt for composition and pay 5% of turnover. It cannot collect GST from customers, must print “composition taxable person” on bills, and files quarterly payments with an annual return. Because the regular rate is already 5% without ITC, the benefit is mainly simpler compliance. Composition restaurants can generally still list on delivery apps. Full conditions are in our composition scheme guide.
Registration and licences to open a restaurant
- GST registration once turnover crosses ₹20 lakh (₹10 lakh in special category states). Delivery apps generally ask for a GSTIN at onboarding, so most restaurants register early even below the threshold; see our GST registration service.
- FSSAI registration or licence based on turnover; see our FSSAI guide.
- Shop and establishment registration, health trade licence from the municipality, fire NOC for larger premises, and a liquor licence where applicable.
A worked comparison
A standalone restaurant sells ₹10 lakh of food in a month and buys ₹4 lakh of ingredients and services carrying ₹30,000 of GST.
| Standalone restaurant (5%, no ITC) | Hotel restaurant at specified premises (18%, with ITC) | |
|---|---|---|
| GST charged to customers | ₹50,000 | ₹1,80,000 |
| ITC on purchases | Not available; ₹30,000 becomes a cost | ₹30,000 set off |
| Net GST paid in cash | ₹50,000 | ₹1,50,000 |
| Cost to the business of GST on inputs | ₹30,000 | Nil |
The customer pays much less at the standalone restaurant, but the restaurant absorbs its input GST. That is why rent and commission negotiations matter more for restaurants than for most businesses.
Frequently asked questions
What is the GST rate on restaurants?
5% without input tax credit for most restaurants, including AC restaurants and takeaway. Restaurants in hotels that supplied any room above ₹7,500 a night in the previous year charge 18% with ITC.
Can restaurants claim input tax credit?
No, not at the 5% rate. ITC is available only to restaurants in specified hotel premises charging 18%.
Who pays GST on Swiggy and Zomato orders?
The e-commerce operator collects and pays the 5% GST on restaurant services under section 9(5). The restaurant does not pay it again.
Is GST on takeaway food different?
No. Takeaway and delivery from a restaurant carry the same 5% without ITC.
Can a restaurant opt for the composition scheme?
Yes, with turnover up to ₹1.5 crore. It pays 5% of turnover and cannot collect GST from customers.
Opening or running a restaurant?
FilingBase handles GST registration, FSSAI and monthly returns, including reconciliation with Swiggy and Zomato statements.
Keep reading.
GSTR-2B explained
The auto-drafted ITC statement, the 14th-of-the-month cycle, IMS actions, and a reconciliation routine that works.
Read guide→GuideGST Composition Scheme in 2026: Turnover Limits, Rates, Who Cannot Opt In, Returns, and When It Actually Saves Money
1%, 5% or 6% on turnover with five filings a year, in exchange for no input credit and no inter-state sales. The limits, the exclusions and the maths.
Read guide→GuideInput Tax Credit Under GST: The Four Conditions, GSTR-2B and IMS, the Time Limit, the 180-Day Rule and the Blocked Credits
The four conditions for credit, why GSTR-2B and the invoice management system now decide it, the 30 November deadline, the 180-day rule and the blocked list.
Read guide→Official references
The statutory sources behind this page. We keep our guidance aligned to them — verify anything time-sensitive directly.
- Ministry of Corporate AffairsCompanies Act filings, forms and fee schedules
- Income Tax DepartmentReturns, forms, rates and e-filing utilities
- GST PortalRegistration, returns and rate notifications
Content on this page is reviewed by a chartered accountant or advocate at LexVerge LLP. It is general guidance, not advice on your specific facts.