GST on restaurant food in India: 5% vs 18% (2026)

Most restaurants in India charge 5% GST on food, without input tax credit (ITC). The 18% rate applies only to restaurants in "specified premises" — a hotel where any room tariff is ₹7,500 or more per night — and those can claim ITC. When a customer orders through Zomato or Swiggy, the platform (not the restaurant) is liable to pay the 5% GST on that restaurant service under Section 9(5), in force since 1 January 2022. This guide explains the rules in plain terms. It is general information, not tax advice — confirm your position with a chartered accountant.

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5% or 18%? The quick answer

The single test for 5% vs 18% is whether the restaurant sits in specified premises — a hotel where the value of any unit of accommodation exceeds ₹7,500 a night. If it does, dining there is 18% with ITC. Otherwise it is 5% without ITC.

Why 5% comes without input tax credit

At 5%, a restaurant cannot claim input tax credit on its purchases — rent, ingredients, equipment, utilities. The 5% rate is a flat, lower rate in exchange for giving up ITC. At 18% (specified premises), the restaurant can claim ITC on its inputs. For most independent restaurants and cloud kitchens, 5% without ITC is the applicable position.

Section 9(5): who pays GST on Zomato and Swiggy orders

Since 1 January 2022 (Notification No. 17/2021-Central Tax (Rate), dated 18 November 2021), "restaurant service" supplied through an e-commerce operator is covered by Section 9(5). This means:

• The e-commerce operator (Zomato, Swiggy and similar platforms) is liable to pay the 5% GST on the restaurant service ordered through it.
• This applies whether or not the restaurant is registered under GST.
• There is no input tax credit on this supply.
• The restaurant does not separately charge GST on that order to the customer; the platform handles it.

This does not remove your own GST obligations on dine-in, takeaway and your own website orders — only the restaurant-service portion routed through the aggregator shifts to the platform. Separately, delivery and platform fees the aggregator charges you can carry their own GST. Reconcile your aggregator statements carefully; a CA can confirm the split for your accounts.

When customers order on your own ordering page, your normal GST position applies (typically 5% without ITC for a standalone restaurant). See how Menuthere handles your online ordering for India, where money lands in your own Razorpay or Cashfree account.

Composition scheme for restaurants

Small restaurants can opt for the GST composition scheme:

• Rate: 5% total (2.5% CGST + 2.5% SGST) on turnover, for restaurants not serving alcohol.
• Eligibility: aggregate turnover up to ₹1.5 crore in the preceding financial year (₹75 lakh for special-category states).
• No input tax credit, simpler quarterly payments and lighter filing.

The composition scheme suits smaller outlets that want simpler compliance. A service provider (not a restaurant) under composition pays 6% (3% + 3%); restaurants have their own 5% rate.

When you must register for GST

• Threshold: registration is compulsory once aggregate turnover crosses ₹20 lakh a year (₹10 lakh in special-category states).
• Aggregators: listing on Zomato or Swiggy effectively requires GST registration from the start.
• Registration is free on the GST portal.

Worked example: a 5% standalone restaurant

A customer's dine-in bill is ₹1,000 of food. At 5% GST:

• Food: ₹1,000
• GST (5%): ₹50
• Total: ₹1,050

The restaurant cannot claim ITC on the GST it paid on its own rent, ingredients or equipment. If the same restaurant were inside a hotel charging ₹8,000 a night for rooms (specified premises), the rate would be 18% — ₹180 on ₹1,000 — but the restaurant could then claim ITC on its inputs.

In short

Keep more of each order

GST aside, the bigger drain on a restaurant's margin is aggregator commission. Taking orders on your own page lets you avoid 20–30% commission on top of GST. Menuthere gives you an online ordering system for India with UPI and card, a QR code menu, and WhatsApp ordering — all at 0% commission, with money in your own Razorpay or Cashfree account. Compare what you currently pay on Zomato and Swiggy.

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