GST Rate for Restaurants - Updated 2026 Slab & HSN Details

Understanding GST Rates for Restaurants in India

As of the effective date of 1st July 2017, the GST rate for restaurants in India is 5% for those with a turnover of up to ₹1 crore, and 18% for those with a turnover exceeding ₹1 crore, but with an input tax credit. However, the GST Council has made several changes to the GST rates and rules for restaurants since its introduction. Currently, the GST rate for restaurants is 5% without input tax credit. The HSN/SAC code for restaurant services is 9963.

The GST rate for restaurants is as follows:

HSN/SAC Code	Service Description	GST Rate (%)	Effective Date
9963	Restaurant services	5	1st July 2017

Calculator Widget

You can use the following calculator widget to calculate the total GST amount for your restaurant services:

Base Price (in ₹): Calculate GST

function calculateGst() { var basePrice = document.getElementById("base-price").value; var gstRate = 0.05; var gstAmount = basePrice * gstRate; document.getElementById("gst-amount").innerHTML = "Total GST Amount: ₹" + gstAmount.toFixed(2); }

Detailed Tax Breakdown for Restaurants

The GST rate for restaurants is 5% without input tax credit. This means that restaurants will have to pay a GST of 5% on their total turnover, without being able to claim input tax credit on their purchases.

The tax breakdown for restaurants is as follows:

Type of Restaurant	GST Rate (%)	Input Tax Credit
Non-Air Conditioned	5	No
Air Conditioned	5	No

Comparison with Pre-GST Tax Regime

Prior to the introduction of GST, restaurants were subject to a service tax of 15% and a value-added tax (VAT) of 12.5% to 15%, depending on the state. The total tax burden for restaurants was around 20% to 25%.

The GST rate of 5% without input tax credit is lower than the pre-GST tax rate, but it also means that restaurants will not be able to claim input tax credit on their purchases.

Frequently Asked Questions

Here are some frequently asked questions regarding input tax credit and compliance for restaurants:

• Q: Can restaurants claim input tax credit on their purchases?
• A: No, restaurants cannot claim input tax credit on their purchases, as they are subject to a GST rate of 5% without input tax credit.
• Q: What is the HSN/SAC code for restaurant services?
• A: The HSN/SAC code for restaurant services is 9963.
• Q: What is the effective date of the GST rate for restaurants?
• A: The effective date of the GST rate for restaurants is 1st July 2017.

Compliance Tips

Here are some compliance tips for restaurants to avoid common billing mistakes:

1. Ensure that the GST rate of 5% is correctly applied to all restaurant services.
2. Do not claim input tax credit on purchases, as it is not allowed for restaurants.
3. Use the correct HSN/SAC code (9963) for restaurant services.
4. Keep accurate records of all transactions, including invoices and receipts.
5. File GST returns on time to avoid penalties and fines.

Special Conditions or Exemptions

There are some special conditions or exemptions that apply to restaurants, including:

• Small restaurants with a turnover of up to ₹20 lakhs are exempt from GST registration.
• Restaurants that provide services to SEZ units or developers are exempt from GST.
• Restaurants that provide services to international passengers are exempt from GST.

It is essential to note that these exemptions and special conditions are subject to change, and restaurants should consult with a tax professional to ensure compliance with all applicable laws and regulations.

Conclusion

In conclusion, the GST rate for restaurants in India is 5% without input tax credit, with an effective date of 1st July 2017. Restaurants should use the correct HSN/SAC code (9963) and comply with all applicable laws and regulations to avoid penalties and fines.

It is crucial for restaurants to understand the GST rules and regulations and to consult with a tax professional to ensure compliance with all applicable laws and regulations.