GST on restaurant bills
Almost every restaurant bill should carry 5% GST — air-conditioned or not. 18% applies only to restaurants inside hotels that charge more than ₹7,500 a night for a room.
This is the single most misunderstood thing about eating out in India. Many people still believe AC restaurants charge 18% — that rule was scrapped in November 2017, yet bills and articles quoting it are still around.
Which rate applies to you
| Where you ate | Rate |
|---|---|
| Standalone restaurant, café, dhaba or local eatery — AC or non-AC, with or without a bar licence | 5% |
| Restaurant inside a hotel that charges more than ₹7,500 a night for a room | 18% |
| Food ordered through a delivery app | 5% |
Note what is not on that list: the food itself, and whether the room is air-conditioned. A plate of dal costs the same rate as a steak in the same restaurant. The tax follows the premises.
Checking your own bill
Take the food total before any tax, then apply the rate.
At 5% — a ₹1,200 food bill at a standalone restaurant:
₹1,200 × 5% = ₹60, split as ₹30 CGST + ₹30 SGST. Total ₹1,260.
At 18% — the same ₹1,200 at a restaurant inside a hotel with rooms above ₹7,500 a night:
₹1,200 × 18% = ₹216, split as ₹108 CGST + ₹108 SGST. Total ₹1,416.
A restaurant is nearly always in the same state as you, so restaurant bills show CGST + SGST rather than IGST. An IGST line on a dine-in bill is unusual and worth questioning.
Check a 5% bill → Check an 18% bill →
Service charge is not a tax
This is where most overcharging happens, and it is worth being precise about.
GST is a government tax. Service charge is not. It is a fee the restaurant adds of its own accord, and Indian consumer guidance has held that it cannot be levied compulsorily — you may ask for it to be removed. Restaurants often print it directly above the GST lines, which makes it look like part of the tax block. It is not.
Two things to watch on the bill:
- Service charge sitting inside the tax section. Placement does not make it a tax. If you did not want to pay it, it can be contested.
- GST computed on top of the service charge. Whether the service charge belongs in the taxable value is contested, and practice varies between restaurants. If you had the service charge removed, the GST should be recomputed on the reduced amount rather than left as printed.
Discounts come first
GST applies to what you actually pay. If the restaurant gives you a ₹200 discount on a ₹1,200 bill, the tax should be calculated on ₹1,000, not ₹1,200.
At 5% that is ₹50 rather than ₹60. A small difference on one meal, but a bill that applies the discount after the tax line has charged you tax on money you never paid. It is worth a glance.
Signs a bill is wrong
- 18% at a standalone restaurant. Air-conditioning and a bar licence do not change the rate. Unless the restaurant is inside a hotel charging more than ₹7,500 a night, food should be billed at 5% — an 18% line is worth asking about.
- A separate "VAT" line. VAT was replaced by GST in 2017. On a food bill today it should not appear. Alcohol is the exception — it stayed outside GST and is still taxed under state excise and VAT, so a bar bill can legitimately show both.
- No GSTIN printed on the bill. A business collecting GST must display its registration number. If tax is being charged and no GSTIN appears anywhere, ask.
- Tax charged twice — once on individual items and again on the total.
Frequently asked
Why does my food delivery receipt show more than one GST rate?
The food itself is generally taxed at 5%, the same as dining in at a standalone restaurant, and the platform usually collects and remits it rather than the restaurant. Platform and convenience fees are separate services the app charges you, and they carry their own GST — usually 18%. So a delivery receipt can legitimately show both rates.
Is there GST on alcohol at a restaurant?
Alcohol for human consumption was deliberately left outside GST and remains under state excise and VAT. This is why a bill with drinks can show a GST block for the food and a separate VAT block for the alcohol. Both appearing together is not an error.
Can I claim GST on a business meal?
Input tax credit on food and beverage is restricted, and a client dinner is generally not claimable even with a GSTIN on the invoice. There are narrow exceptions where the supply is obligatory for an employer. Ask your accountant before assuming a restaurant bill is claimable.
Before you rely on this
This page is a plain-language reference, not the official schedule. Restaurant taxation involves conditions this page cannot fully capture, and the treatment of an individual establishment can turn on details of its registration. For a disputed bill or anything you intend to file, confirm against the current CBIC notification or ask a qualified tax professional. Spotted something wrong? Tell us.