GST Rate on Restaurant Bill: 5% vs 18%

The GST rate on restaurant bills depends on several factors including whether the restaurant is air-conditioned, its star rating, and whether the restaurant has Input Tax Credit (ITC) eligibility. Here's the complete breakdown:

Restaurant Type GST Rate CGST + SGST ITC Eligibility
Small Restaurant (Non-AC, Turnover < Rs 40 lakh) 5% 2.5% + 2.5% No ITC
Budget Restaurant (Non-AC, Turnover > Rs 40 lakh) 5% 2.5% + 2.5% With ITC
Fast Food Chains (Dominos, KFC, McDonald's) — Takeout/Delivery 5% 2.5% + 2.5% Yes (generally)
AC Restaurant, Dine-In 18% 9% + 9% Yes
Fast Food Chains — Dine-In 18% 9% + 9% Yes
5-Star Hotel Restaurant 18% 9% + 9% Yes

Key Points About GST on Restaurant Bills:

  • 5% GST Without ITC: Small restaurants with annual turnover below Rs 40 lakh pay 5% GST but cannot claim Input Tax Credit on their purchases. This means their input cost remains higher.
  • 5% GST With ITC: Restaurants with turnover above Rs 40 lakh can claim ITC and recover taxes paid on ingredients, electricity, rent, etc., reducing their effective tax burden.
  • 18% GST: AC restaurants, 5-star hotels, and dine-in at fast food chains charge 18% GST. This is split equally: 9% CGST (Central) + 9% SGST (State).
  • Takeout vs Dine-In: Fast food chains often charge 5% for takeaway/delivery orders but 18% for dine-in. This is a key difference in your bill.

How to Read GST on Your Restaurant Bill

Understanding the breakdown of your restaurant bill is important. Every GST invoice from a registered restaurant must show the food price, CGST, and SGST separately. Here's how to read it:

Restaurant Bill Breakdown Example (18% GST)

Restaurant Name: ABC AC Restaurant, Mumbai
Bill Date: 12-Mar-2026
GST No: 27AAAAN1234K1Z0
Biryani × 2: Rs 600
Lassi × 2: Rs 200
Naan × 4: Rs 200
Subtotal (Food): Rs 1,000
CGST (9%): Rs 90
SGST (9%): Rs 90
Total GST (18%): Rs 180
TOTAL BILL: Rs 1,180

How to Calculate GST on Your Bill:

Formula: Food Price × GST Rate ÷ 100 = GST Amount

Example Calculation (18% GST):

If your food bill is Rs 1,000 and GST rate is 18%:

→ Total GST = Rs 1,000 × 18 ÷ 100 = Rs 180

→ CGST (Central) = Rs 180 ÷ 2 = Rs 90

→ SGST (State) = Rs 180 ÷ 2 = Rs 90

→ Final Bill = Rs 1,000 + Rs 180 = Rs 1,180

What to Check on Your Restaurant Bill:

  • Restaurant GST Number: Look for a valid 15-digit GST registration number (starting with state code). Unregistered restaurants shouldn't charge GST.
  • CGST and SGST Split: These should always be equal (CGST = SGST). For 18% GST, both are 9%. For 5% GST, both are 2.5%.
  • HSN Code: For restaurant bills, the HSN code should be 5395 (Restaurant and Bar Services).
  • Service Charge Separate: Service charge (if applicable) should be listed separately from GST and taxed accordingly.
  • Itemized Food List: Your bill should show each food item ordered with its price before tax.

Dominos/KFC/McDonald's Bill After GST

Popular fast food chains in India apply GST differently for takeaway vs dine-in orders. Here's how your bill looks at major chains:

Dominos Bill Example

Dominos Takeaway Order:

Pizzas, sides, and beverages are charged at 5% GST for delivery/takeaway. A Rs 500 order becomes Rs 525 (Rs 25 GST).

Dominos Dine-In:

When eating inside Dominos, 18% GST applies. The same Rs 500 pizza now costs Rs 590 (Rs 90 GST). Some outlets also add 10% service charge on top.

KFC Bill Example

KFC Takeaway/Delivery (5% GST):

Chicken bucket with sides costs Rs 600 → Add 5% GST → Rs 630 (Rs 30 GST)

KFC Dine-In (18% GST):

Same Rs 600 chicken bucket at dine-in → Add 18% GST → Rs 708 (Rs 108 GST). Plus potential 10% service charge if applicable.

McDonald's Bill Example

McDonald's Counter Order (5% GST):

A Rs 400 combo meal takeaway = Rs 420 total (Rs 20 GST)

McDonald's Dine-In (18% GST):

Same Rs 400 combo inside the restaurant = Rs 472 total (Rs 72 GST). Many McDonald's locations charge additional service/convenience fee.

Key Learning:

The difference between takeaway and dine-in GST can be significant. A Rs 500 meal costs Rs 25 extra for takeaway (5% GST) but Rs 90 extra for dine-in (18% GST) — that's Rs 65 more! Always check your fast food receipt to verify the GST rate applied.

GST on Hotel Bill vs Restaurant Bill — What's the Difference?

Many customers confuse GST on hotel room rent with GST on restaurant food. They have completely different tax structures in India.

GST on Hotel Room Rent

Hotel room GST depends on the room tariff (nightly rate), not the restaurant type:

  • Room Tariff Below Rs 1,000/night: 0% GST (No tax)
  • Rs 1,000 - Rs 2,500/night: 5% GST
  • Rs 2,500 - Rs 7,500/night: 12% GST
  • Above Rs 7,500/night: 28% GST
Hotel Room GST Calculation:

A 5-star hotel charges Rs 10,000 per night. GST applicable = 28%

Room Bill = Rs 10,000 + (Rs 10,000 × 28%) = Rs 10,000 + Rs 2,800 = Rs 12,800

GST on Hotel Restaurant Food

Food items sold in a hotel's restaurant follow regular restaurant GST rules (5% or 18%), NOT the hotel room tariff rules:

  • AC Restaurant in Hotel: 18% GST on food
  • Budget Restaurant in Hotel: 5% GST on food
Hotel Restaurant Food Bill:

At a 5-star hotel's restaurant, a Rs 2,000 dinner has 18% GST (not 28%)

Food Bill = Rs 2,000 + (Rs 2,000 × 18%) = Rs 2,000 + Rs 360 = Rs 2,360

The high GST on the room (28%) does NOT apply to the restaurant bill (18%)

Important Distinction:

When you're charged a hotel room rent of Rs 10,000, the 28% GST applies only to the room. Your meal at the hotel restaurant is taxed separately at 18% (AC restaurant). These are two separate charges with different GST treatment.

Service Charge vs GST on Restaurant Bills — Know the Difference

One of the biggest confusions among Indian restaurant customers is mixing up service charge with GST. They are completely different and independently levied on your bill.

What is Service Charge?

  • Definition: Service charge is a discretionary tip/gratuity charged by restaurants for staff service (typically 10-15% of the food bill).
  • Mandatory or Optional: According to RBI guidelines, service charge should be optional. However, some restaurants add it by default.
  • Who Gets It: Service charge is paid to the restaurant staff as compensation for service.
  • GST on Service Charge: Service charge itself is subject to GST. So you pay GST on the service charge amount as well.
  • Can You Refuse?: Yes! You can refuse or negotiate service charge if it's added by default to your bill.

What is GST?

  • Definition: GST (Goods and Services Tax) is a mandatory government tax on food and beverages.
  • Mandatory or Optional: Completely mandatory. All registered restaurants must charge and deposit GST with the government.
  • Who Gets It: GST is collected by the restaurant and paid to the government (split between Center and State).
  • Rate: 5% or 18% depending on restaurant type.
  • Can You Refuse?: No. GST is non-negotiable on all food bills.

Real-World Bill Example — Showing Both Service Charge & GST

Biryani: Rs 500
Kebab: Rs 400
Subtotal: Rs 900
Service Charge (10%): Rs 90
Subtotal with Service: Rs 990
GST on Food (18%): Rs 162
GST on Service Charge (18%): Rs 16.20
TOTAL BILL: Rs 1,168.20

Calculation Breakdown:

→ Food Price: Rs 900 | Service Charge (10%): Rs 90 | Subtotal: Rs 990

→ GST (18%) on Rs 900 food: Rs 162

→ GST (18%) on Rs 90 service: Rs 16.20

→ Total = Rs 900 + Rs 90 + Rs 162 + Rs 16.20 = Rs 1,168.20

Quick Comparison Table:

Aspect Service Charge GST
What is it? Discretionary tip to staff Government tax
Mandatory? Optional (should be refusable) Mandatory
Typical Rate 10-15% 5% or 18%
Recipient Restaurant staff Government
GST Applicable on It? Yes, GST charged on service charge N/A (GST itself is a tax)

How Restaurant Owners Create GST Bills on Restaurant Bill

Understanding how restaurant owners generate GST bills helps you verify your bill's authenticity. Every registered restaurant in India must issue a GST invoice for every sale, showing itemized details.

GST Invoice Requirements for Restaurants

According to GST rules, every restaurant bill/invoice must contain:

  • Restaurant Details: Business name, address, GST registration number, and state code
  • Bill Information: Bill date, bill number, invoice serial number
  • Customer Details: Customer name and address (if B2B)
  • Item Details: Food name, quantity, HSN code (5395 for restaurant services), unit price
  • Tax Details: Subtotal amount, CGST (9% or 2.5%), SGST (9% or 2.5%), total GST
  • Final Amount: Total bill amount including GST
  • QR Code: Many restaurants now include QR codes linking to government GST verification

Manual vs Digital GST Bill Generation

Smaller Restaurants (Non-Digital): Some small, non-AC restaurants still manually create bills using paper or basic receipt machines. However, they're legally required to maintain digital records and issue proper invoices.

Registered Restaurants (Digital): Most AC restaurants and all chain restaurants use billing software or GST invoicing platforms to auto-generate bills with correct tax calculations and GST details.

WhatsApp-Based Restaurants & GST Billing

Many small restaurants in India operate primarily through WhatsApp — taking orders, confirming deliveries, and collecting payments via WhatsApp. For these businesses, managing GST billing used to be challenging. Today, WhatsApp-integrated GST billing apps make it simple:

Traditional Method: Restaurant owner writes bill on paper → manually calculates tax → customer struggles to verify → no digital record
WhatsApp GST Billing App (GSTBill.app): Customer orders on WhatsApp → App auto-calculates food cost + 5/18% GST → Owner generates bill in seconds → Bill sent directly via WhatsApp → Digital record maintained → Tax deposit simplified

GST Invoice Format for Restaurants

Field Example Purpose
Restaurant Name XYZ Biryani House Business identification
GST Registration No. 27AAEFC1234H1Z5 Tax authority verification
Bill Number BILL-2026-001 Record tracking
Date 12-Mar-2026 Transaction timing
HSN Code 5395 Service classification (Restaurant)
Food Item Biryani × 1 Itemization
Price Rs 400 Food cost before tax
CGST Rate & Amount 9% = Rs 36 Central tax component
SGST Rate & Amount 9% = Rs 36 State tax component
Total Rs 472 Final bill amount

Restaurant Owner? Create GST Bills on WhatsApp in 60 Seconds

Stop worrying about tax calculations, manual bill writing, and compliance. Whether you're a dhabha, fast food outlet, or fine dining restaurant, GSTBill.app simplifies GST invoicing for WhatsApp-based orders.

Features: Auto-calculate 5% or 18% GST, itemized bills with CGST-SGST split, WhatsApp integration, digital records, tax reports

Chat on WhatsApp Now

Frequently Asked Questions on GST Restaurant Bills

Q: What is the GST rate on restaurant bills in India?

A: GST on restaurant bills ranges from 5% to 18%. Small non-AC restaurants and takeaway orders typically have 5% GST (CGST 2.5% + SGST 2.5%), while AC restaurants and dine-in services charge 18% GST (CGST 9% + SGST 9%). 5-star hotel restaurants always charge 18% GST on food, separate from the room tariff.

Q: How do I calculate CGST and SGST on my restaurant bill?

A: CGST (Central GST) and SGST (State GST) are always split equally. For an 18% GST bill, you pay 9% CGST + 9% SGST. For a 5% GST bill, you pay 2.5% CGST + 2.5% SGST. Both are calculated on the food price before tax. For example, on a Rs 1,000 bill with 18% GST, CGST = Rs 90 and SGST = Rs 90, making total GST = Rs 180.

Q: What is the GST on Dominos, KFC, and McDonald's bills?

A: Fast food chains charge 5% GST for takeaway and delivery orders, but 18% GST for dine-in bills. So a Rs 500 Dominos takeaway bill would be Rs 525 (5% GST), but the same food costs Rs 590 if you eat inside (18% GST). Always check your receipt to see which rate was applied.

Q: Is service charge the same as GST on restaurant bills?

A: No. Service charge (typically 10-15%) is a discretionary tip to staff, while GST (5-18%) is a government tax. Both are separate charges on your bill. You can refuse service charge if added by default, but GST is mandatory. GST is also charged on the service charge amount itself, increasing your total bill further.

Q: What is the difference between GST on hotel room and restaurant food?

A: Hotel room GST depends on room tariff: Rs 1-1000 (0%), Rs 1000-2500 (5%), Rs 2500-7500 (12%), Above Rs 7500 (28%). But restaurant food in the same hotel follows regular restaurant GST rules (5-18%), NOT the room tariff rule. So a meal at a 5-star hotel restaurant is 18% GST, not 28%.

Q: How do small restaurant owners create GST bills without expensive software?

A: WhatsApp-based GST billing apps like GSTBill.app allow small restaurant owners to instantly generate proper GST invoices for every order. Simply enter food items and price, and the app auto-calculates CGST+SGST, generates a formatted bill, and sends it via WhatsApp. No subscription, no complex setup—just WhatsApp and a GST billing tool.

Learn More About GST Billing & Invoicing:

Home GST Bill Format GST Invoice Format What is a GST Invoice? GST Calculator CGST vs SGST Explained GST Invoice for Services GST Bill Kaise Banaye (Hindi)