GST Rate for Restaurant - Updated 2026 Slab & HSN Details

Understanding GST Rates for Restaurants in India

As of the effective date, the GST rate for restaurants in India is 5% without input tax credit (ITC) and 12% with ITC. The HSN/SAC code for restaurant services is 9963. The GST council has mandated these rates to ensure uniformity across the country. The GST rate for restaurants is as follows:

HSN/SAC Code	Service Description	GST Rate (%)
9963	Restaurant services (without ITC)	5
9963	Restaurant services (with ITC)	12

For instance, if a restaurant in India provides services without ITC, the GST amount would be 5% of the base price. Users can calculate the total GST amount using our calculator widget below:

Enter the base price:
GST rate (%):
Total GST amount:
Calculate GST

function calculateGST() { var basePrice = document.getElementById("base-price").value; var gstRate = document.getElementById("gst-rate").value; var totalGST = (basePrice * gstRate) / 100; document.getElementById("total-gst").value = totalGST; }

Restaurant Taxation in India: A Detailed Breakdown

Composition Scheme vs Regular Scheme

Restaurants in India can opt for either the composition scheme or the regular scheme. The composition scheme is applicable for restaurants with an annual turnover of up to ₹1.5 crore. Under this scheme, the GST rate is 5% without ITC. On the other hand, the regular scheme is applicable for restaurants with an annual turnover exceeding ₹1.5 crore. Under this scheme, the GST rate is 12% with ITC.

Scheme	Annual Turnover	GST Rate (%)
Composition Scheme	Up to ₹1.5 crore	5 (without ITC)
Regular Scheme	Exceeding ₹1.5 crore	12 (with ITC)

Comparison with Pre-GST Tax Regime

Pre-GST vs GST Taxation

Prior to the implementation of GST, restaurants in India were subject to multiple taxes, including service tax, value-added tax (VAT), and luxury tax. The pre-GST tax regime was complex and led to a cascading effect, resulting in higher tax burdens for restaurants. The GST regime has simplified the tax structure, reducing the tax burden for restaurants.

Tax Type	Pre-GST Rate (%)	GST Rate (%)
Service Tax	15	5 (without ITC)
VAT	12.5-15	12 (with ITC)
Luxury Tax	10-15	0

Frequently Asked Questions

Input Tax Credit and Compliance

Restaurants in India often have questions regarding input tax credit and compliance. Here are some frequently asked questions:

• Q: Can restaurants claim input tax credit on purchases?
  • A: Yes, restaurants can claim input tax credit on purchases under the regular scheme.
• Q: What is the compliance requirement for restaurants under GST?
  • A: Restaurants must file GST returns (GSTR-3B and GSTR-1) on a monthly or quarterly basis, depending on their annual turnover.
• Q: Can restaurants opt for the composition scheme if they have an annual turnover exceeding ₹1.5 crore?
  • A: No, restaurants with an annual turnover exceeding ₹1.5 crore are not eligible for the composition scheme.

Restaurants in India must ensure compliance with GST regulations to avoid penalties and fines. Our compliance tips section provides guidance on common billing mistakes and how to avoid them.

Compliance Tips for Restaurants

Avoiding Common Billing Mistakes

Restaurants in India must be aware of common billing mistakes that can lead to penalties and fines. Here are some compliance tips:

1. Ensure accurate invoicing, including GST rates and amounts.
2. Verify the GSTIN of suppliers and customers.
3. Maintain accurate records of purchases and sales.
4. File GST returns on time to avoid late fees and penalties.

By following these compliance tips, restaurants in India can ensure seamless GST compliance and avoid common billing mistakes.