GST Rate for Restaurants in India - Updated 2026 Slab & HSN Details

Introduction to Restaurants in India

Restaurants in India are a vibrant and diverse industry, with a wide range of cuisines and dining experiences available to consumers. The country's rich cultural heritage and geographic diversity have given rise to a unique and exciting food scene, with popular dishes like biryani, tandoori chicken, and naan bread. In this article, we will explore the world of restaurants in India, including the applicable GST percentage slab, relevant HSN/SAC code, and other important information for restaurant owners and consumers.

GST Rate for Restaurants in India

The GST rate for restaurants in India is 5% for non-AC restaurants and 18% for AC restaurants, with a condition that input tax credit (ITC) is not available for non-AC restaurants. The HSN/SAC code for restaurant services is 9963.

HSN/SAC Code	Service Description	GST Rate (%)
9963	Restaurant services (non-AC)	5
9963	Restaurant services (AC)	18

Tax Breakdown for Restaurants in India

The tax breakdown for restaurants in India depends on the type of restaurant and the services provided. Non-AC restaurants are taxed at 5%, while AC restaurants are taxed at 18%. The tax rate is applied to the total bill amount, including food and beverages.

Composition Scheme vs Regular Scheme

Restaurant owners in India have the option to choose between the composition scheme and the regular scheme. The composition scheme is a simplified tax scheme that allows restaurant owners to pay a fixed percentage of their turnover as tax, without having to maintain detailed records. The regular scheme, on the other hand, requires restaurant owners to maintain detailed records and pay tax on their actual profits.

Scheme	Tax Rate (%)	Eligibility
Composition Scheme	5	Turnover up to ₹1.5 crore
Regular Scheme	18	Turnover above ₹1.5 crore

Comparison with Pre-GST Tax Regime

The pre-GST tax regime in India had a complex system of taxes, including service tax, VAT, and luxury tax. The GST regime has simplified the tax system, with a single tax rate applicable to all restaurant services. However, the GST rate is higher than the pre-GST tax rate, which has increased the tax burden on restaurant owners.

Impact on Restaurant Owners

The GST regime has had a significant impact on restaurant owners in India. The increased tax rate has reduced profit margins, and the complexity of the GST system has increased compliance costs. However, the GST regime has also simplified the tax system, reducing the number of taxes and increasing transparency.

• Increased tax rate: The GST rate is higher than the pre-GST tax rate, which has increased the tax burden on restaurant owners.
• Reduced profit margins: The increased tax rate has reduced profit margins for restaurant owners, making it challenging to maintain competitiveness.
• Increased compliance costs: The complexity of the GST system has increased compliance costs, including the cost of maintaining records and filing tax returns.

Frequently Asked Questions

Here are some frequently asked questions about GST for restaurants in India:

Input Tax Credit

Input tax credit (ITC) is available to restaurant owners who pay tax on their inputs, such as food and beverages. ITC can be claimed on the GST paid on inputs, which can reduce the tax liability of the restaurant owner.

1. What is input tax credit? Input tax credit is the tax paid on inputs, such as food and beverages, which can be claimed as a credit against the tax liability of the restaurant owner.
2. How can I claim input tax credit? Input tax credit can be claimed by filing a tax return and providing details of the inputs and the tax paid on them.
3. What are the conditions for claiming input tax credit? The conditions for claiming input tax credit include maintaining detailed records of inputs and tax paid, and filing tax returns on time.

Compliance Tips

Here are some compliance tips for restaurant owners in India:

• Maintain detailed records: Maintain detailed records of inputs, tax paid, and tax returns filed.
• File tax returns on time: File tax returns on time to avoid penalties and interest.
• Claim input tax credit: Claim input tax credit on the tax paid on inputs to reduce tax liability.

Calculator Widget

Here is a calculator widget that can be used to calculate the GST amount on a restaurant bill:

Base Price: GST Rate (%): Calculate GST

const basePrice = document.getElementById('base-price'); const gstRate = document.getElementById('gst-rate'); const gstAmount = document.getElementById('gst-amount'); const calculateGST = () => { const gst = (basePrice.value * gstRate.value) / 100; gstAmount.innerText = `GST Amount: ₹${gst}`; }; document.querySelector('button').addEventListener('click', calculateGST);