Complete GST Billing Guide for Restaurants in India (2025)

GST compliance is one of the most confusing — and most consequential — aspects of running a restaurant in India. Get it wrong and you face penalties, audit notices, and disallowed Input Tax Credit claims. Get it right and your billing is clean, your returns are filed on time, and your accountant stops calling you every month.

This guide covers everything restaurant owners need to know about GST in 2025 — the applicable rates, which returns to file, how ITC works, and how the right billing software makes all of this automatic.

GST Rates for Restaurants in India (2025)

The GST Council simplified restaurant tax slabs in September 2025. Here's the current rate structure:

GST Returns Restaurants Must File

Every GST-registered restaurant must file the following returns:

GSTR-1 — Outward Supplies

GSTR-1 reports all your sales (outward supplies) for the month. If your annual turnover is below ₹5 crore, you can file quarterly under the QRMP scheme. Above ₹5 crore, you file monthly. This return includes all B2B invoices with GSTIN details, B2C sales summaries, and credit/debit notes.

GSTR-3B — Summary Return & Tax Payment

GSTR-3B is a monthly summary return where you report your net GST liability and make the tax payment. It must be filed by the 20th of the following month. This is where most restaurants make errors — miscalculating the net liability or missing the deadline.

GSTR-9 — Annual Return

GSTR-9 is the annual return filed once a year, reconciling all monthly/quarterly returns. It's mandatory for businesses with turnover above ₹2 crore.

Can Restaurants Claim Input Tax Credit?

This is the most common source of confusion. The answer depends on your GST rate:

• If you charge 5% GST — you cannot claim ITC on any inputs (raw materials, equipment, furniture, etc.)
• If you charge 18% GST — you can claim ITC on eligible inputs including raw materials, kitchen equipment, furniture, and services

Most standalone restaurants in India charge 5% and therefore cannot claim ITC. This is a deliberate trade-off — the lower rate is simpler to administer and passes savings to customers.

What Must a GST-Compliant Restaurant Bill Include?

Every tax invoice issued by a GST-registered restaurant must include:

1. Your GSTIN (GST Identification Number)
2. Invoice number and date
3. Customer name and address (for B2B transactions, also their GSTIN)
4. Description of goods/services (food items)
5. HSN/SAC code for each item
6. Taxable value and applicable GST rate (CGST + SGST or IGST)
7. Total invoice value including GST

GST on Food Delivery (Zomato, Swiggy)

Since January 2022, food delivery platforms like Zomato and Swiggy collect and remit GST on behalf of restaurants for orders placed through their platforms. This means:

• The platform collects 5% GST from the customer
• The platform remits this GST to the government
• You report these sales in your GSTR-1 but the tax liability is on the platform
• Your own dine-in and direct delivery orders still require you to collect and remit GST

This distinction is critical for accurate GSTR-3B filing. Mixing up platform-collected GST with your own collections is one of the most common compliance errors.

How Billing Software Handles GST Automatically

Manually calculating GST for every transaction, maintaining invoice records, and preparing GSTR-1 data is time-consuming and error-prone. Modern restaurant billing software like XionPOS handles all of this automatically:

• Applies the correct GST rate (5% or 18%) based on your restaurant configuration
• Generates GST-compliant invoices with all required fields automatically
• Maintains a complete record of all transactions with GSTIN details
• Generates GSTR-1 ready reports with B2B and B2C breakdowns
• Produces daily, monthly, and custom-period GST summaries
• Separates platform-collected GST (Zomato/Swiggy) from direct sales
• Exports data in formats compatible with GST filing portals

Common GST Mistakes Restaurants Make

• Applying the wrong GST rate (5% vs 18%) based on incorrect restaurant classification
• Missing the GSTR-3B filing deadline (20th of each month) — attracts late fees of ₹50/day
• Not maintaining proper invoice records for B2B customers who need ITC
• Incorrectly reporting Zomato/Swiggy orders in GSTR-3B
• Claiming ITC when charging 5% GST (not allowed)
• Not registering for GST when turnover crosses ₹20 lakh (₹10 lakh for special category states)

GST Registration Threshold for Restaurants

Restaurants must register for GST if their annual turnover exceeds:

• ₹20 lakh — for most states
• ₹10 lakh — for special category states (Manipur, Mizoram, Nagaland, Tripura)

Even if you're below the threshold, voluntary GST registration can be beneficial if you have significant B2B customers who need tax invoices.

Frequently Asked Questions

What is the GST rate for restaurants in India 2025?

Most standalone restaurants in India charge 5% GST without Input Tax Credit. Restaurants in starred hotels (room tariff above ₹7,500/night) charge 18% GST with ITC eligibility.

Do restaurants need to file GSTR-1?

Yes. GST-registered restaurants must file GSTR-1 monthly (or quarterly under QRMP if turnover is below ₹5 crore) to report all outward supplies.

Can restaurants claim Input Tax Credit on GST?

Restaurants charging 5% GST cannot claim ITC. Only restaurants charging 18% GST can claim ITC on eligible inputs.

What happens if I miss the GSTR-3B deadline?

Late filing of GSTR-3B attracts a late fee of ₹50 per day (₹25 CGST + ₹25 SGST) for returns with tax liability, and ₹20 per day for nil returns, up to a maximum of ₹10,000.