Before the implementation of GST, restaurant bills included multiple components:
- VAT: Applied to the food portion of the bill.
- Service Tax: Tax on the services provided by the restaurant.
- Service Charge: Additional charge by the restaurant, not a tax.
Under the VAT system, different items on the menu were taxed at different rates, complicating the billing process. GST rates on food aimed to standardise this by replacing multiple taxes with a single tax rate applicable to the entire bill.
What were the Original GST Rules for Restaurants?
When the GST was first launched in July 2017, restaurants could fall into three different rate slabs. If the restaurant did not have air conditioning, the GST charged was 12%. For a restaurant with AC or a liquor license, 18% GST is applicable. For restaurants within five-star hotels, the GST rate was set at 28%, and at that time, all Indian restaurants in India could take advantage of the input tax credit.
This implies that when you paid GST while buying supplies for your restaurant, you could subtract that amount from your tax bill. That helped reduce costs for many restaurants.
GST rates on Food, Beverage Services, and Accommodation
GST rates on Food, Beverage Services, and Accommodation
| Description | Applicable GST Rate |
| Food services provided by restaurants including takeaway facility (both air-conditioned and non-a/c) | 5% with No ITC |
| Any food/drink served at cafeteria/canteen/mess operating on a contract basis in the office, industrial unit, or by any school, college, etc on basis of a contractual agreement that is not event-based or occasional | 5% with No ITC |
| Services provided by restaurants within a hotel with a room tariff of less than Rs. 7,500 | 5% with No ITC |
| Services provided by restaurants within a hotel with a room tariff of Rs. 7,500 or more | 18% |
| Meals/food services provided by Indian Railways/IRCTC or their licensees both in trains or at platforms | 5% with No ITC |
| Food services provided on a premise arranged for organizing function along with renting of such premises | 18% |
| Food services provided at exhibitions, events, conferences, and outdoor & indoor functions that are event-based or occasional in nature | 18% |
| Other Accommodation, food, and beverage services | 18% |
Note: Then rates given in the list are subject to periodic change
GST on Food items
| Description | Applicable GST Rate |
| GST on fresh/chilled vegetables such as potatoes, onions, garlic, leek, etc. | Nil |
| GST on non-container dried leguminous packed vegetables(shelled) whether skinned/split or not | NIL |
| GST on fruits such as fresh grapes, fresh/dried coconut, fresh/dried bananas/plantain, fresh apples, fresh pears, etc. | Nil |
| GST on non-veg items such as meat (not in a container, whether fresh or chilled) | Nil |
| GST on eggs in the shell (fresh/cooked/preserved) | Nil |
| GST on unsweetened milk (pasteurized/unpasteurized), cream, etc. | Nil |
| GST on container packed vegetables (uncooked/steamed/boiled) | Nil |
| GST on vegetables preserved using brine/other means unsuitable for immediate human consumption | Nil |
| GST on meat packed in a container having a registered trademark or brand name | 5% |
| GST on eggs not in shell/egg yolks boiled or cooked by steaming | 5% |
| GST on dried leguminous vegetables packed in a container having a registered trademark/brand name (skinned/split or not) | 5% |
| GST on vegetables such as ginger (excluding fresh ginger), turmeric (excluding fresh turmeric), thyme, curry leaves, bay leaves, etc. | 5% |
| GST on food such as meal/powder of dried leguminous vegetables | 5% |
| GST on fruits, vegetables, nuts, and edible plant parts preserved using sugar | 12% |
| GST on vegetables, fruits, nuts, and edible parts of the plant that are preserved/prepared using vinegar/acetic acid. | 12% |
| GST on food items prepared using flour, malt extract, etc. including cocoa less than 40% of total weight. | 18% |
| GST on chocolate and other cocoa products | 18% |
FAQs
Q1. What is the rate of GST applicable on hocolate and cocoa products?
Chocolates and cocoa products have a GST rate of 18%.
Q2. Is there GST on takeaway food?
Yes, takeaway food does have GST. The GST rate on takeaway food can be either 5% or 18%, depending on where the restaurant is located.
Q3. Is there a different GST rate for air-conditioned and non-air-conditioned restaurants?
No, there is no difference in GST rates for air-conditioned and non-air-conditioned restaurants under the current GST structure. Both are generally taxed at 5%.
Q4. Is GST applicable to packaged and processed food items?
Yes, GST on food items is applicable to packaged and processed food items, with rates generally ranging from 5% to 18%, depending on the type of product.
