Restaurant GST Rates & Billing: AC vs Non-AC, Takeaway & Delivery
GST rates for Indian restaurants: 5% vs 18%, billing compliance, ITC claims, and common mistakes to avoid in 2026.
Quick Answer
Non-AC restaurants and takeaway charge 5% GST (no ITC). AC restaurants with liquor licence charge 18% GST (ITC available). Display GST-inclusive prices on your menu. Common mistake: charging wrong rate after adding AC or starting liquor service.
GST Rate Structure for Restaurants (2026)
Restaurant GST depends on three factors: air conditioning, liquor licence, and service type (dine-in vs takeaway). Getting this wrong is one of the most common compliance issues flagged in GST audits.
- Non-AC restaurant, no liquor: 5% GST, no input tax credit
- AC restaurant OR liquor licence: 18% GST, ITC available on inputs
- Takeaway/delivery (no AC dining area): 5% GST regardless of kitchen AC
- Cloud kitchen: typically 5% if no AC dining, 18% if branded dine-in exists
- All prices on menu must be GST-inclusive since 2022
Menu Pricing Must Include GST
Since 2022, restaurants must display GST-inclusive prices on all menus — printed and digital. Showing "₹200 + GST" on customer-facing menus is non-compliant.
When you update prices on your DineCard digital menu, ensure all prices are GST-inclusive. Change your GST rate category once if you add AC or a liquor licence — update every menu item accordingly.
Billing Best Practices
Every bill needs: GSTIN, HSN/SAC code (9963 for restaurant services), tax rate, CGST/SGST split, and invoice number. Use billing software integrated with your POS — manual bills invite errors.
Keep menu price lists as supporting documents for GST audits. A digital menu with date-stamped change history (DineCard updates are timestamped) helps prove when prices changed.
Common GST Mistakes Indian Restaurants Make
Charging 5% after installing AC in dining area. Not issuing bills for cash orders. Claiming ITC while charging 5% rate. Mixing takeaway (5%) and dine-in (18%) on same bill incorrectly.
Review your GST category annually. If you renovated and added AC, your rate likely changed from 5% to 18%. Update menus and billing software immediately.
Frequently Asked Questions
Do I charge 5% or 18% GST?
5% if non-AC dining with no liquor licence. 18% if you have AC in the dining area OR serve liquor. Takeaway from non-AC outlet is 5%.
Must menu prices include GST?
Yes. All customer-facing menus must show GST-inclusive prices. Update your digital menu whenever rates or prices change.
Can I claim ITC on restaurant GST?
Only if you charge 18% GST (AC or liquor). At 5% rate, no input tax credit is available on purchases.
Keep GST-inclusive prices current on your menu
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