{"id":12159,"date":"2025-09-25T14:33:47","date_gmt":"2025-09-25T09:03:47","guid":{"rendered":"https:\/\/razorpay.com\/learn\/?p=12159"},"modified":"2026-02-09T18:23:18","modified_gmt":"2026-02-09T12:53:18","slug":"gst-on-food-and-restaurants","status":"publish","type":"post","link":"https:\/\/razorpay.com\/learn\/gst-on-food-and-restaurants\/","title":{"rendered":"GST on Food and Restaurants: Key Rules and Tax Rates Explained"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_80 counter-hierarchy ez-toc-counter ez-toc-transparent ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69ebe20170069\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69ebe20170069\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/razorpay.com\/learn\/gst-on-food-and-restaurants\/#Latest-Update-for-GST-on-Restaurant-in-2026\" >Latest Update for GST on Restaurant in 2026<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/razorpay.com\/learn\/gst-on-food-and-restaurants\/#GST-on-Food-and-Restaurants-in-India\" >GST on Food and Restaurants in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/razorpay.com\/learn\/gst-on-food-and-restaurants\/#Restaurant-Bills-Before-GST-Implementation\" >Restaurant Bills Before GST Implementation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/razorpay.com\/learn\/gst-on-food-and-restaurants\/#What-were-the-Original-GST-Rules-for-Restaurants\" >What were the Original GST Rules for Restaurants?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/razorpay.com\/learn\/gst-on-food-and-restaurants\/#GST-on-Restaurant-Food-Services-Beverage-Services-and-Accommodation\" >GST on Restaurant Food &amp; Services, Beverage Services, and Accommodation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/razorpay.com\/learn\/gst-on-food-and-restaurants\/#GST-on-Food-Items\" >GST on Food Items<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/razorpay.com\/learn\/gst-on-food-and-restaurants\/#Understanding-GST-Rules-for-Restaurants\" >Understanding GST Rules for Restaurants<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/razorpay.com\/learn\/gst-on-food-and-restaurants\/#Food-Bill-Pre-and-Post-GST-Era-with-Example\" >Food Bill Pre and Post GST Era with Example<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/razorpay.com\/learn\/gst-on-food-and-restaurants\/#Impact-of-GST-on-Food-Items-and-Restaurants\" >Impact of GST on Food Items and Restaurants<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/razorpay.com\/learn\/gst-on-food-and-restaurants\/#Frequently-Asked-Questions\" >Frequently Asked Questions<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Latest-Update-for-GST-on-Restaurant-in-2026\"><\/span><b>Latest Update for GST on Restaurant in 2026<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p data-start=\"119\" data-end=\"508\">Starting April 1, 2025, diners at restaurants located within hotels classified as \u2018specified premises\u2019 will be subject to <strong data-start=\"241\" data-end=\"252\">18% GST<\/strong> on their restaurant bills. As per the latest government circular, hotels that do not fall under the \u2018specified premises\u2019 category have the option to either continue charging <strong data-start=\"431\" data-end=\"441\">5% GST<\/strong> or shift to <strong data-start=\"454\" data-end=\"465\">18% GST<\/strong>, depending on their chosen tax structure.<\/p>\n<p data-start=\"510\" data-end=\"746\">Opting for the higher rate will lead to increased costs for customers. However, hotels can potentially offset this impact through strategic planning and operational adjustments to manage pricing and customer experience more effectively.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"GST-on-Food-and-Restaurants-in-India\"><\/span><b>GST on Food and Restaurants in India<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">In India, the <a href=\"https:\/\/razorpay.com\/learn\/gst-goods-and-services-tax-guide\/\">Goods and Services Tax<\/a> (GST) on food items and restaurant services varies depending on factors such as the type of establishment, whether the food is branded or unbranded, and the nature of service (dine-in or takeaway).<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As per current norms:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>5% GST<\/b><span style=\"font-weight: 400;\"> is applicable to most restaurant services, including dine-in and takeaway, provided the restaurant does not claim Input Tax Credit (ITC). This is the standard <\/span><b>restaurant GST rate<\/b><span style=\"font-weight: 400;\"> applicable across most casual dining outlets.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>18% GST<\/b><span style=\"font-weight: 400;\"> is charged on food served at restaurants located within hotels where the room tariff exceeds \u20b97,500 per night, and where ITC is claimed.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Unbranded and unpackaged food items<\/b><span style=\"font-weight: 400;\"> such as cereals, pulses, and fresh vegetables are <\/span><b>exempt<\/b><span style=\"font-weight: 400;\"> from GST. In contrast, <\/span><b>branded and packaged food products<\/b><span style=\"font-weight: 400;\"> attract a <\/span><b>5% or 12% GST<\/b><span style=\"font-weight: 400;\">, depending on the item and branding status\u2014impacting the applicable <\/span><b>food GST rate<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The <\/span>GST on restaurant food<span style=\"font-weight: 400;\"> has replaced the previous VAT and Service Tax system, streamlining tax compliance for the sector. However, it is important to note that the <\/span>service charge<span style=\"font-weight: 400;\"> levied by some restaurants is separate from GST and remains a discretionary charge for consumers.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Overall, the applicable restaurant <\/span>GST rate on food<span style=\"font-weight: 400;\"> depends on whether the food is served in a restaurant, packaged and branded, or sold unprocessed. Staying updated with the latest rate slabs helps businesses and consumers better understand their tax liabilities.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For alcoholic liquor for human consumption, GST is not applicable. Instead, it continues to be taxed by individual State Governments through excise duty and state-level taxes. <\/span><span style=\"font-weight: 400;\">However, <a href=\"https:\/\/razorpay.com\/learn\/gst-on-liquor\/\">GST on alcohol<\/a> is not charged. State-level VAT in charged on Alcohol.<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><strong>For example,<\/strong> if you\u2019re at a restaurant that serves both food and alcohol, you\u2019ll pay GST on the food and non-alcoholic drinks, while VAT will be applied to the alcoholic beverages. <\/span><span style=\"font-weight: 400;\">For everyday food purchases, the restaurant GST rates range from 0% to 18%, depending on what you\u2019re buying.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Restaurant-Bills-Before-GST-Implementation\"><\/span><b>Restaurant Bills Before GST Implementation<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Before the implementation of GST, restaurant bills included multiple components:<\/span><\/p>\n<ul>\n<li><b>VAT:<\/b><span style=\"font-weight: 400;\"> Applied to the food portion of the bill.<\/span><\/li>\n<li><b>Service Tax:<\/b><span style=\"font-weight: 400;\"> Tax on the services provided by the restaurant.<\/span><\/li>\n<li><b>Service Charge:<\/b><span style=\"font-weight: 400;\"> Additional charge by the restaurant, not a tax.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Under the VAT system, different items on the menu were taxed at different rates, complicating the billing process. GST rates on food aimed to standardise this by replacing multiple taxes with a single tax rate applicable to the entire bill.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"What-were-the-Original-GST-Rules-for-Restaurants\"><\/span><strong>What were the Original GST Rules for Restaurants?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Restaurants fell under three different GST rate slabs, when the GST was first launched in July 2017.<\/p>\n<ul>\n<li>GST Rate on restaurants without air conditioning was subject to an 12% GST.<\/li>\n<li>GST Rate on restaurants with air conditioning or a liquor license was subject to an 18% GST.<\/li>\n<li>GST Rate on restaurants within five-star hotels was subject to a 28% GST.<\/li>\n<\/ul>\n<p>At that time, all Indian restaurants in India could take advantage of the input tax credit. It is applicable when you paid GST while buying supplies for your restaurant, you could subtract that amount from your tax bill.<\/p>\n<p><b>Related Read: <\/b><a href=\"https:\/\/razorpay.com\/learn\/gst-on-air-conditioners-ac\/\u201d\"><b>GST Rate on Air Conditioners (AC): Find Latest GST Rate &amp; HSN Code<\/b><\/a><\/p>\n<h2><span class=\"ez-toc-section\" id=\"GST-on-Restaurant-Food-Services-Beverage-Services-and-Accommodation\"><\/span><b>GST on Restaurant Food &amp; Services, <\/b><strong>Beverage Services, and Accommodation<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Under GST, Restaurants fall under the 5% GST rate, with no option to claim input tax credit (ITC) or the 18% GST rate, with ITC claims.<\/p>\n<p><a href=\"https:\/\/razorpay.com\/learn\/gst-rates-goods-and-service-tax-rates-slabs\/\">GST rate<\/a> is decided depending on the location of the restaurant. For example, a higher GST rate would be applicable for restaurants located within hotels where the room tariff exceeds a specific amount.<\/p>\n<p><span style=\"font-weight: 400;\">The <\/span>GST rate on restaurant food <span style=\"font-weight: 400;\">services is determined based on the type of establishment and other factors.<\/span><\/p>\n<table dir=\"ltr\" border=\"1\" cellspacing=\"0\" cellpadding=\"0\" data-sheets-root=\"1\" data-sheets-baot=\"1\">\n<colgroup>\n<col width=\"825\" \/>\n<col width=\"171\" \/><\/colgroup>\n<tbody>\n<tr>\n<td>\n<h3>Type of Service<\/h3>\n<\/td>\n<td>\n<h3>GST Rate<\/h3>\n<\/td>\n<\/tr>\n<tr>\n<td>GST on standalone restaurants, including takeaway (Non-AC)<\/td>\n<td>5% with No Input Tax Credit<\/td>\n<\/tr>\n<tr>\n<td>GST on standalone restaurants, including takeaway (AC)<\/td>\n<td>5% with No Input Tax Credit<\/td>\n<\/tr>\n<tr>\n<td>GST on restaurants within hotels (room tariff &lt; Rs. 7500)<\/td>\n<td>5% with No Input Tax Credit<\/td>\n<\/tr>\n<tr>\n<td>GST on restaurants within hotels (room tariff \u2265 Rs. 7500)<\/td>\n<td>18% with Input Tax Credit<\/td>\n<\/tr>\n<tr>\n<td>GST on outdoor catering services<\/td>\n<td>18% with Input Tax Credit<\/td>\n<\/tr>\n<tr>\n<td>GST on Quick Service Restaurants (QSR)<\/td>\n<td>5% with No Input Tax Credit<\/td>\n<\/tr>\n<tr>\n<td>Meals\/food services provided by Indian Railways\/IRCTC or their licensees both in trains or at platforms.<\/td>\n<td>5% with No Input Tax Credit<\/td>\n<\/tr>\n<tr>\n<td>Any food\/drink served at cafeteria\/canteen\/mess operating on a contract basis in the office, industrial unit, or by any school, college, etc on basis of a contractual agreement that is not event-based or occasional<\/td>\n<td>5% with No Input Tax Credit<\/td>\n<\/tr>\n<tr>\n<td>Food services provided on a premise arranged for organizing function along with renting of such premises<\/td>\n<td>18%<\/td>\n<\/tr>\n<tr>\n<td>Other Accommodation, food, and beverage services<\/td>\n<td>18%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2><span class=\"ez-toc-section\" id=\"GST-on-Food-Items\"><\/span><b>GST on Food Items<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<table>\n<tbody>\n<tr>\n<td>\n<h3><b>Food Items<\/b><\/h3>\n<\/td>\n<td>\n<h3><strong>GST Rate<\/strong><\/h3>\n<\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">GST on fresh, chilled, frozen vegetables<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Nil<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">GST on dried vegetables that are packaged and labelled<\/span><\/td>\n<td><span style=\"font-weight: 400;\">5%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">GST on dried leguminous vegetables other than pre-packaged and labelled<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Nil<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">GST on dried leguminous vegetables that are pre-packaged and labelled<\/span><\/td>\n<td><span style=\"font-weight: 400;\">5%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">GST on fresh\/dried coconuts, grapes, apples, bananas, and pears, among others<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Nil<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">GST on fruits like citrus fruits, grapes, pear, apples, bananas, papaya, melons, pears, mangoes, and berries, among others<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Nil<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">GST on vegetables, fruits, nuts, and edible plant parts that are preserved using sugar<\/span><\/td>\n<td><span style=\"font-weight: 400;\">12%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">GST on fruits, nuts, and edible plant parts that are preserved and\/or prepared using vinegar and\/or acetic acid.<\/span><\/td>\n<td><span style=\"font-weight: 400;\">12%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">GST on rye other than pre-packaged and labelled<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Nil<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">GST on rye, pre-packaged and labelled<\/span><\/td>\n<td><span style=\"font-weight: 400;\">5%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">GST on pasteurized milk (excluding UHT milk) fresh milk, and milk and cream (not concentrated nor contains added sugar or sweeteners)<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Nil<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\"><a href=\"https:\/\/razorpay.com\/learn\/gst-on-milk-paneer-curd-dairy-products\/\">GST on milk<\/a> and cream that is concentrated or contains added sugar or sweeteners<\/span><\/td>\n<td><span style=\"font-weight: 400;\">5%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">GST on curd, buttermilk, and lassi, other than pre-packaged and pre-labelled<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Nil<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">GST on curd, buttermilk, and lassi that is pre-packaged and pre-labelled<\/span><\/td>\n<td><span style=\"font-weight: 400;\">5%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">GST on yoghurt and cream, whether containing sugar\/flavouring or not<\/span><\/td>\n<td><span style=\"font-weight: 400;\">5%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">GST on fresh or chilled meat and fish<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Nil<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">GST on meat that is packaged and labelled<\/span><\/td>\n<td><span style=\"font-weight: 400;\">5%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">GST on pre-packaged and labelled cereal flours other than of wheat or meslin, rye, etc.<\/span><\/td>\n<td><span style=\"font-weight: 400;\">5%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">GST on chocolate and food preparations containing cocoa<\/span><\/td>\n<td><span style=\"font-weight: 400;\">18%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">GST on birds\u2019 eggs in shells<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Nil<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">GST on birds\u2019 eggs which are not in a shell<\/span><\/td>\n<td><span style=\"font-weight: 400;\">5%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\"><a href=\"https:\/\/razorpay.com\/learn\/gst-on-rice-and-other-essential-commodities\/\">GST on rice<\/a> other than pre-packaged and labelled<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Nil<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">GST on rice, pre-packaged and labelled<\/span><\/td>\n<td><span style=\"font-weight: 400;\">5%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">GST on wheat or meslin (i.e. maize flour) other than pre-packaged or labelled<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Nil<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">GST on pre-packaged and labelled wheat or meslin<\/span><\/td>\n<td><span style=\"font-weight: 400;\">5%<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<p><em><strong>Related Read: <a href=\"https:\/\/razorpay.com\/learn\/what-is-the-gst-hsn-code\/\">GST HSN Code List<\/a><br \/>\nRelated Read: <a href=\"https:\/\/razorpay.com\/learn\/gst-on-sugar\/\">GST on Sugar in India: Updated HSN Code &amp; Tax Rates<\/a><br \/>\n<\/strong><\/em><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Understanding-GST-Rules-for-Restaurants\"><\/span><b>Understanding GST Rules for Restaurants<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Restaurants in India fall under two broad categories for GST purposes:<\/p>\n<h3><b>1. Standalone Restaurants<\/b><\/h3>\n<p>Standalone restaurants, which are not located within hotels and do not provide accommodation services, are generally subject to a\u00a0<strong>5% GST rate<\/strong>\u00a0on their services. However, they do not have the option to claim Input Tax Credit (ITC) on the GST paid for their inputs.<\/p>\n<p>This 5% GST rate applies to both food and beverages served by standalone restaurants.<\/p>\n<h3><b>2. Restaurants within Hotels<\/b><\/h3>\n<p>Restaurants that are part of hotels where the room tariff is Rs. 7,500 or more per day fall under a different GST category. These restaurants are subject to an\u00a0<strong>18% GST rate<\/strong>\u00a0on their services, including food and beverages served. The key difference here is that they can claim Input Tax Credit (ITC) for the GST paid on their inputs, such as raw materials, services, and other supplies used in providing the restaurant services.<\/p>\n<p><em><span style=\"text-decoration: underline;\"><strong>Note:<\/strong><span style=\"font-weight: 400;\"> GST rates are subject to periodic changes.<\/span><\/span><\/em><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Food-Bill-Pre-and-Post-GST-Era-with-Example\"><\/span>Food Bill Pre and Post GST Era with Example<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In the below example, the total amount payable to the tax authorities under the current regime sums up to Rs.950. However, under GST, net outflow from the pocket will be Rs.250, thanks to the reduced rates.<\/p>\n<table dir=\"ltr\" border=\"1\" cellspacing=\"0\" cellpadding=\"0\" data-sheets-root=\"1\" data-sheets-baot=\"1\">\n<colgroup>\n<col width=\"161\" \/>\n<col width=\"164\" \/>\n<col width=\"167\" \/><\/colgroup>\n<tbody>\n<tr>\n<td>\n<h3><strong>Particulars<\/strong><\/h3>\n<\/td>\n<td>\n<h3><strong>Billing under VAT regime<\/strong><\/h3>\n<\/td>\n<td>\n<h3><strong>Billing under GST regime<\/strong><\/h3>\n<\/td>\n<\/tr>\n<tr>\n<td>Total Bill<\/td>\n<td>5000<\/td>\n<td>5000<\/td>\n<\/tr>\n<tr>\n<td><strong>Output Tax<\/strong><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>VAT @14.5%<\/td>\n<td>725<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>Service tax@6%<\/td>\n<td>300<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>GST @5%<\/td>\n<td><\/td>\n<td>250<\/td>\n<\/tr>\n<tr>\n<td><strong>Total output tax liability<\/strong><\/td>\n<td>1025<\/td>\n<td>250<\/td>\n<\/tr>\n<tr>\n<td>Input credit<\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td><strong>VAT ITC (no ITC on ST)<\/strong><\/td>\n<td>75<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>GST ITC<\/td>\n<td><\/td>\n<td>\u2013<\/td>\n<\/tr>\n<tr>\n<td><strong>Final Output tax liability<\/strong><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td><strong>VAT<\/strong><\/td>\n<td>650<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td><strong>Service Tax<\/strong><\/td>\n<td>300<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td><strong>GST<\/strong><\/td>\n<td><\/td>\n<td>250<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2><span class=\"ez-toc-section\" id=\"Impact-of-GST-on-Food-Items-and-Restaurants\"><\/span><b>Impact of GST on <\/b><b>Food Items and <\/b><b>Restaurants<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The Goods and Services Tax (GST) has significantly impacted the Indian restaurant industry and the taxation of food items.<\/span><\/p>\n<h3><b>1. Decrease in Effective Tax<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Before GST, customers had to deal with various taxes like VAT and Service Tax. With GST, these taxes were combined into a single rate, which led to a slight decrease in the overall cost of dining out. However, this reduction wasn&#8217;t very significant, and the service charge at restaurants stayed the same.<\/span><\/p>\n<h3>2. Input Tax Credit on Food and Restaurant Services<\/h3>\n<p><span style=\"font-weight: 400;\">For restaurant owners, GST was expected to improve their cash flow by allowing them to get back the Input tax credit they paid on things like raw materials and rent. Initially, they couldn&#8217;t claim ITC. Although there have been changes since then, restaurants that charge 5% GST on their food services still can\u2019t get these tax credits, unlike those charging 18% GST.<\/span><\/p>\n<h3><b>3. Exemption for Fresh and Frozen Food<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">As for food items, most fresh and frozen products, like vegetables and meat, are not taxed under GST. Only packaged foods with brand names are taxed. GST Rate on restaurants within five-star hotels was subject to a 28% GST. So, there haven\u2019t been any major price changes in food GST rate.<\/span><span style=\"font-weight: 400;\">.<\/span><\/p>\n<h3><b>4. Tax Slabs for Food Items<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Food items and food services are categorized under various GST tax slabs, primarily 5% and 12%. This ensures that essential food items are not subjected to high taxation, with a maximum GST rate of 18% applicable to food services provided by restaurants.<\/span><\/p>\n<p><em><strong>Related Reads: <\/strong><\/em><\/p>\n<ul>\n<li><em><strong><a href=\"https:\/\/razorpay.com\/learn\/what-is-cgst-sgst-igst\/\">Understand what CGST, SGST, IGST, and UTGST are<\/a><\/strong><\/em><\/li>\n<li><a href=\"https:\/\/razorpay.com\/learn\/gst-on-insurance-premium\/\"><em><strong>GST on Insurance Premium<\/strong><\/em><\/a><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Frequently-Asked-Questions\"><\/span><b>Frequently Asked Questions<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3>1. How Much GST Tax on Food in Restaurant?<\/h3>\n<p><span style=\"font-weight: 400;\">GST Rate on restaurants without AC is charged at a GST of 12%. GST Rate on restaurants with AC or liquor licenses is charged at an 18% GST.<\/span><\/p>\n<h3><b>2. What is the rate of GST applicable on chocolate and cocoa products?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Chocolates and cocoa products have a GST rate of 18%.<\/span><\/p>\n<h3><b>3. Is there GST on takeaway food?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Yes, takeaway food does have GST. The GST rate on takeaway food can be either 5% or 18%, depending on where the restaurant is located.<\/span><\/p>\n<h3><b>4. What are the GST Rates on Catering Services?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">GST rates on outdoor catering services is 18% (with ITC).<\/span><\/p>\n<h3><b>5. Is there a different GST rate for air-conditioned and non-air-conditioned restaurants?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">No, there is no difference in GST rates for air-conditioned and non-air-conditioned restaurants under the current GST structure. Both are generally taxed at 5%.<\/span><\/p>\n<h3><b>6. Is GST applicable to packaged and processed food items?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Yes, <\/span><b>GST on food items<\/b><span style=\"font-weight: 400;\"> is applicable to packaged and processed food items, with rates generally ranging from 5% to 18%, depending on the type of product.<\/span><\/p>\n<h3><b>7. What is the GST rate on food served in trains?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The GST rate on food served in trains is 5%, irrespective of whether the food is cooked on board or supplied from outside.<\/span><\/p>\n<h3><b>8. What is the highest GST rate applicable on food items?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The Highest GST rate on food items is 40% GST. This applies to aerated waters with sugar, caffeinated beverages, and fruit-based carbonated drinks<\/span><\/p>\n<h3><b>9. Are there any food items exempt from GST?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Yes, most fresh and frozen foods like vegetables, fresh fruits, meat, fish, etc. are exempt from GST.<\/span><\/p>\n<h3><b>10. Can restaurants claim input tax credit (ITC) on GST paid?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Restaurants can claim ITC if they charge 18% GST, but not if they charge 5% GST.<\/span><\/p>\n<div class=\"flex flex-grow flex-col max-w-full\">\n<div class=\"min-h-[20px] text-message flex w-full flex-col items-end gap-2 whitespace-pre-wrap break-words [.text-message+&amp;]:mt-5 overflow-x-auto\" dir=\"auto\" data-message-author-role=\"assistant\" data-message-id=\"fb6bde04-1242-4f25-90ef-82a3f954275b\">\n<div class=\"flex w-full flex-col gap-1 empty:hidden first:pt-[3px]\">\n<div class=\"markdown prose w-full break-words dark:prose-invert light\">\n<h3>11. Is GST mandatory for customers to pay on food?<\/h3>\n<p class=\"first-token\" data-sourcepos=\"1:1-1:13\">Yes, GST is generally applicable to food items and restaurant services in India.<\/p>\n<p data-sourcepos=\"3:1-3:16\">While some fresh and unprocessed food items are exempt, most packaged food products and restaurant meals are subject to food GST rate. The specific GST rate depends on factors like the type of food, restaurant location, and whether the food is served for consumption or sold as a packaged product.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Latest Update for GST on Restaurant in 2026 Starting April 1, 2025, diners at restaurants located within hotels classified as \u2018specified premises\u2019 will be subject to 18% GST on their restaurant bills. As per the latest government circular, hotels that do not fall under the \u2018specified premises\u2019 category have the option to either continue charging<\/p>\n","protected":false},"author":151156611,"featured_media":13620,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3435,1],"tags":[3903,3905,3904,4444,4445],"class_list":{"0":"post-12159","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-gst-tax-government","8":"category-uncategorized","9":"tag-gst-on-food","10":"tag-gst-on-food-items","11":"tag-gst-on-restaurant","12":"tag-gst-on-restaurant-food","13":"tag-restaurant-gst-rate"},"_links":{"self":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts\/12159","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/users\/151156611"}],"replies":[{"embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/comments?post=12159"}],"version-history":[{"count":29,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts\/12159\/revisions"}],"predecessor-version":[{"id":18847,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts\/12159\/revisions\/18847"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/media\/13620"}],"wp:attachment":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/media?parent=12159"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/categories?post=12159"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/tags?post=12159"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}