GST on restaurant bills in India: 5% or 18%, ITC, and what every invoice must show

The 5% rate is a concessional rate: you pay a low rate on sales but give up credit on the GST you pay for ingredients, rent, equipment and services. That is why your purchase invoices still matter for income tax, but not for GST credit.

The GST rate rationalisation that took effect on 22 September 2025 kept standalone restaurants at 5% without credit. Public summaries disagree on how restaurants inside hotels with rooms at ₹7,500 or more, and outdoor catering at such premises, are treated afterwards — if that is you, read Notification 10/2025-Central Tax (Rate) with your CA rather than a blog, including this one.

Swiggy and Zomato orders are different again: since 1 January 2022 the platform, not the restaurant, pays the 5% GST on restaurant services it sells (section 9(5) of the CGST Act). Your bill for such an order carries no GST, and it is reported separately in GSTR-1 (Table 14), not with your own sales.

Rule 46 of the CGST Rules lists the contents of a tax invoice. For a restaurant bill the ones that trip people up are:

• Your legal name, address and GSTIN — the trade name alone is not enough.
• A consecutive serial number, unique for the financial year, made of letters, digits and / or − only. One series per GSTIN; it must not skip or repeat.
• Date of issue.
• The buyer’s name, address and GSTIN when they are registered (corporate orders, catering for a company) — this is what puts the sale in B2B rather than B2C.
• SAC (service accounting code) for the service — see the next section — and a description of what was supplied.
• Taxable value, the GST rate, and the tax amount split as CGST + SGST (or IGST for an inter-state supply), plus the place of supply with the state name for inter-state supplies.
• Whether tax is payable on reverse charge (for a restaurant: normally no).
• Signature or digital signature — or none at all when the invoice is issued electronically in a form the rules allow.

Round-off to the nearest rupee and the total in words are not required by the rule, but every accountant expects them, and most billing disputes start with a total that doesn’t match the words.

Use the service code, not the HSN of the dish: a biryani sold by a restaurant is a restaurant service (996331), not a goods supply of rice. Packaged items sold over the counter without any service — a sealed bottle of water, a packet of papad — are goods with their own HSN and rate; keep them on separate lines.

In GSTR-1 the HSN/SAC summary needs 4 digits if your turnover is up to ₹5 crore and 6 digits above that; the six-digit SACs above satisfy both.

Either is legal, as long as the invoice shows the taxable value and the tax separately. Inclusive pricing (₹300 on the menu means ₹300 on the bill, of which ₹14.29 is GST) feels fairer at the counter and is common for dine-in. Extra pricing (₹300 + 5%) is common for catering quotes and corporate orders where the buyer claims nothing anyway but wants the base price visible.

Whichever you pick, back-calculating inclusive tax line by line and then rounding the total is where spreadsheets go wrong by a rupee. The totals must add up on the invoice, in GSTR-1 and in your books.

Once a tax invoice is issued it exists for GST purposes even if the customer never paid. If the amount was wrong, the order was cancelled after billing or goods came back, issue a credit note against that invoice (section 34). The invoice number stays used; the credit note has its own series and is reported in GSTR-1 (Table 9B for registered buyers, the unregistered summary otherwise). Deleting the invoice and reusing the number is the one thing that gets a numbering series rejected in an audit.

If your aggregate turnover under one PAN crossed ₹5 crore in any financial year since 2017-18, every B2B invoice (and credit note) must be reported to the Invoice Registration Portal, which returns an IRN and a signed QR code that must be printed on the invoice. B2C restaurant bills are not e-invoiced. Once you cross the threshold you stay in, even if turnover later falls.