GST on Restaurant Food in India (2026): 5% vs 18% Explained
Most restaurants charge 5% GST (without input tax credit) on dine-in, takeaway and catering; restaurants inside premium hotels (room tariff above ₹7,500/night) charge 18% with ITC. Here's exactly when each applies and how food delivery is treated.
Part of: The Complete GST Guide for Small Business in India (2026)
Restaurant GST confuses a lot of owners because there are two rates — and which one applies depends on where the restaurant sits, not what it serves. This guide clears up 5% vs 18%, input tax credit, and how app-based delivery is taxed, current for 2026.
Quick answer: standalone restaurants charge 5% GST with NO input tax credit. Restaurants inside a hotel where room tariff exceeds ₹7,500/night charge 18% WITH input tax credit.
Restaurant GST rates at a glance
| Type of restaurant / service | GST rate | ITC |
|---|---|---|
| Standalone restaurant — dine-in, takeaway, room service | 5% | No |
| Restaurant in hotel with room tariff ≤ ₹7,500/night | 5% | No |
| Restaurant in hotel with room tariff > ₹7,500/night | 18% | Yes |
| Outdoor catering (standalone) | 5% | No |
| Cloud kitchen / takeaway-only | 5% | No |
The 5% no-ITC trade-off
At 5%, a restaurant cannot claim input tax credit on its purchases (rent, ingredients, equipment). That's the deal: a low customer-facing rate in exchange for no credit. Premium hotel restaurants at 18% can claim ITC, which offsets their higher output rate. You don't get to choose — it's set by the room-tariff test above.
Food delivery apps
For orders through e-commerce operators (Zomato/Swiggy-type platforms), the platform is liable to collect and pay the 5% GST on the restaurant service on notified supplies, rather than the restaurant. Any separate delivery fee charged to the customer is generally taxed at 18%. Confirm your exact obligations with your CA, as platform rules evolve.
FAQs
Is packaged food in a restaurant taxed differently?
Selling a sealed packaged product (a bottled drink, a branded chocolate) can attract that product's own GST rate rather than the 5% restaurant rate — the restaurant rate applies to the restaurant service (prepared food).
Did restaurant GST change under GST 2.0?
The core 5% (no ITC) / 18% (with ITC, premium hotels) structure remained in place through the September 2025 reforms.
General information only, not tax advice; rules can change. Confirm your restaurant's rate, ITC position and delivery-platform obligations on CBIC notifications or with your CA. Last reviewed: September 2026.
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