GST on Restaurants: Are You Being Charged Correctly?

‘GST on restaurants’ is a topic of great interest to many people. When it comes to restaurants, GST can be a very confusing and daunting task to understand. This is because it is a new tax, and there are not many resources available that can help explain it in simple terms. The best way to learn about it is to find a reliable and reputable source of information.

The implication of GST is simple, and it has some similar rules and patterns put all across the nation. Yet you should try to know the basics of how bills are generated in restaurants coupled with the exact calculation of GST. Knowing these basics would prevent you from being overcharged and ensure that you pay a reasonable amount. But before that, you must try to understand the components of the bill precisely.

GST- Facts and Figures

With the introduction of GST, various other taxes like SGST, IGST, and CGST with Input Tax Credit Adjustmen have been subsumed into GST. Now, the usual GST charges range between 5% and 18% of the bill’s total cost. Yet the key factor here lies in drawing out the accurate details of GST on restaurants that you are liable to pay. Additionally, there are various other aspects related to this. Keep reading to explore all one after the other. 

Updated Changes After 23rd GST Council Meeting for Restaurants

We believe that being up to date is a crucial aspect of life. Simultaneously, we have brought the recent and updated details that are important for you to know.  

After the 23rd GST Council meeting on restaurants, there have been evident changes and relaxations in the GST of AC and Non AC restaurants. Previously the implication of GST on Non-AC restaurants was 12%, and on AC restaurants were 18%. However, with the new revisions, they have been reduced to 5%. Yet there is a condition applicable here, and understanding it would help you understand things better and easier. 

If you go to a restaurant that does not provide hotel or guest house services, you legally need to pay 5% of the GST. Further, if a restaurant has lodging facilities, but the tariff rate of the rooms is less than 7,500, you still will pay 5% GST. Yet if any restaurant staff charges you more, you are liable to file a complaint in the consumer goods department. 

Even after the relaxation, there is a twist in this new revision of GST on restaurants. The other factor here states that if you are eating in a restaurant located in the hotel’s compound, inn, or any lodging-based place, that charges 7,500 or more /room. Then you need to pay a GST of 18% even if you do not use the hotel services. This update bothered many, but then, if you know the rules, you can selectively choose according to your budget. 

Know Before You Pay

Now that you know the percentage of the GST you need to pay, you must also know places with authority to charge GST on you. So, before visiting a site, you can always check a restaurant’s or trader’s GST number by simply clicking on the link below.

After opening the link, all you need to do is fill the blanks with the required GSTIN number and boom! You will have all the details. Knowing the hold of the restaurant in terms of GST would give you an insight that is the charges are genuine or if you are being overcharged. 

Additionally, if the bill does not have the GSTIN number, you have the right to refrain from paying it. So, be vigilant enough to check the GSTIN number. You are nowhere legally bound to pay the tax if it is not there.

All About Service Tax, GST on Restaurants

The government’s most precise and updated statement on service tax says, “As per the approved government guidelines on service charge, service charge is voluntary and not mandatory now. The hotels and restaurants must not decide how much service charge is to be paid by the customer. This should be left to the customer’s discretion.” Hence, you have the hold now to either pay the service tax or not.

Also, the Union Ministry of Consumer Affairs states- “restaurants charging for services is an “unfair trade practice” and therefore cannot be enforced on consumers.” Therefore, the next time you visit a restaurant, feel free to exempt the service tax from the bill. Knowing such crucial matters is necessary as it will not just help you from being fooled. Instead, it will help you to avail yourself of the benefits that government gives you.

Foods Items Excluded from GST

While giving you detailed information about GST, we are adamant about exploring as many facts as possible. So, if you did not know, you must enlighten yourself about certain exemptions of GST on particular eatable products. Therefore, the eatables excluded from the list of GST are- cooking ingredients like flour, wheat, sugar, and more. Other food items such as bread, milk, creams, eggs, and cheese are also on the list.

Furthermore, spices and beverages like tea, coffee, fruit juices, and water bottles are also items in this category. Therefore, whenever you purchase the things mentioned above, you will have a say to refuse to pay GST on these items. Because now you know that there is no GST legally imposed here.

Facts about GST on Restaurants

Many people might wonder if there are any changes in the prices of alcohol and not just GST on restaurants. So here you have the facts you need to know. 

  • GST on alcohol remains the same, which is 5%, with an input tax credit in both AC as well as Non AC restaurants. 
  • On the other hand, the GST on takeaway food remains at 18%. So now you know the reason why takeaway food remains to be costly.
  • GST has officially replaced the VAT and Service Tax regime of food services. You need to pay 12% GST for pre-packed and pre-cooked food items.

How To Complaint Against Fraud GST Trader

By now, you know that you could file a complaint against a trader doing GST fraud. Even if a trader charges you extra or is not liable to charge GST from you. Then you have the authority to file a complaint then and there. Yet, understanding the exact place to complain remains crucial. Therefore, if a restaurant charges you 28% GST or you discover that you are being fooled, you can contact the details mentioned below and let the government do the rest.

Phone: 0120-4888999, 011-23370115

Twitter: @askGST_Goi, @FinMinIndia


GST is something that the government introduced to reduce the confusion with paying taxes. However, there has been a tremendous misunderstanding and constant confusion related to this new law and its implications. Most people are confused and are often fooled and get overcharged due to a lack of knowledge. The statistics of GST are pretty simple and easy to understand, so try to stay updated and informed. Moreover, we have covered almost everything that you need to know about GST on restaurants and tried to leave no room for confusion. 

Our primary reason for highlighting the updated rules of GST was to bring to light all the aspects that a restaurant-loving person should know. If a trader is charging you more than the actual amount, he is not just fooling you but also the government.  Now that you have all the knowledge make choices with the restaurants wisely and be free from not paying any unauthorised charges.

Back to top button