Quick answer
What GST rate applies to restaurants?
Most restaurants, cafes and cloud kitchens charge 5% GST without input tax credit; restaurants in hotels with rooms above ₹7,500 a day charge 18% with credit. On Swiggy and Zomato orders, the app pays the GST.
GST rates for restaurants
| Type of outlet | GST | Input tax credit |
|---|---|---|
| Standalone restaurant, cafe, takeaway or cloud kitchen | 5% | Not allowed |
| Restaurant in a hotel where any room is charged above ₹7,500 a day | 18% | Allowed |
| Outdoor catering (not at such a hotel) | 5% | Not allowed |
| Orders through Swiggy, Zomato and similar apps | The app pays the 5% GST on these orders, not you | |
A standalone restaurant cannot choose 18% just to claim input tax credit. The 5% rate applies.
Composition scheme for small restaurants
Restaurants with yearly turnover up to ₹1.5 crore can opt for composition. You pay 5% on your turnover and file quarterly instead of monthly, with much less paperwork. The trade-off: you cannot show GST separately on the bill, so it comes out of your price. If a large share of your sales comes through delivery apps, we check carefully whether composition still works for you. The choice for a new year must be made by 31 March.
Delivery app sales, reconciled
Swiggy and Zomato pay GST on orders placed through them, deduct income tax TDS of 0.1% from your payouts, and take commission, which carries 18% GST. We match every payout statement with your sales, so delivery orders are not taxed twice and the TDS is claimed in your income tax return.
Everything else a restaurant needs
- FSSAI: basic registration for turnover up to ₹12 lakh, a state licence above that.
- Trade licence from the local body, and Shops and Establishments registration.
- Staff: PF once you have 20 employees and ESI once you have 10, handled with our associate firm. Professional tax for staff.
- TDS on rent for your premises, above the limit.
- Income tax: small restaurants can use presumptive taxation (6% of digital sales and 8% of cash sales as profit) if turnover is within the limit. Others need regular books.
- Bookkeeping from your billing software, with monthly profit and food cost tracking.
What clients say
I had a great experience with silvia consultancy firm. They handled my auditing, tax filing, GST, and FSSAI work very efficiently and professionally. The team is knowledgeable, responsive, and always ready to clarify doubts.
They are extremely patient, take the time to answer all my queries clearly, and make sure I fully understand everything. Their communication is always prompt and professional. Most importantly, they handle my GST filings accurately and always on time, which gives me complete peace of mind.
Read all 139 reviews on Google
Common questions
Do I need GST registration for a small cafe?
Registration is generally needed once your yearly turnover crosses ₹20 lakh. Some cafes register earlier because delivery apps or corporate clients ask for it. We check your situation.
Can I charge 18% GST and claim input tax credit?
Not for a standalone restaurant. The 5% rate without input tax credit applies. 18% with credit applies only to restaurants in hotels where any room is charged above ₹7,500 a day.
Swiggy and Zomato already pay GST on my orders. Do I still report them?
Yes. Those sales must still be reported in your returns in the right place, without paying tax on them again. We reconcile your payout statements every month.
Is composition better for my restaurant?
It often suits small dine-in restaurants with simple operations. It may not suit you if most sales come through delivery apps or if you plan to grow past ₹1.5 crore soon. We compare both for you.
Get a clear quote today
Send us a WhatsApp with a line about your situation. The first consultation is free, and we reply within one working day, usually the same day.