GST on Restaurant Bills in India: The 5% Rule Explained

If you run a restaurant, café, cloud kitchen or food stall in India, GST is not optional — and your bill format is where compliance becomes visible. Here is what actually matters.

The 5% restaurant rate

Most restaurant services attract 5% GST without input tax credit (ITC). That covers dine-in, takeaway and delivery from regular restaurants, cafés, bakeries and cloud kitchens. The exception: restaurants inside hotels with room tariffs above ₹7,500 per night charge 18% with ITC.

CGST + SGST: why your bill shows two tax lines

GST is collected jointly by the Centre and the state. On an intra-state sale, the 5% splits into:

• CGST 2.5% — Central GST
• SGST 2.5% — State GST

So a ₹500 food bill shows CGST ₹12.50 + SGST ₹12.50, not a single "GST ₹25" line. Both halves are rounded separately, which is why totals sometimes differ by a paisa from a naive 5% calculation. (For inter-state sales, a single IGST 5% line applies instead.)

What a compliant bill must show

1. Your GSTIN — the 15-character ID (e.g. 29ABCDE1234F1Z5)
2. Invoice number and date — sequential and unique per financial year
3. Customer details — name (and GSTIN, for registered B2B customers)
4. Itemized dishes with quantities and rates
5. Taxable value, CGST, SGST and the total — each as its own line

Common mistakes to avoid

• Charging 18% as a regular restaurant — the rate is 5% without ITC
• Showing one combined "GST 5%" line instead of the CGST/SGST split
• Missing GSTIN or a non-sequential invoice number
• Charging GST on the tip or service charge incorrectly — the service charge, if any, is part of the taxable value

Generate a compliant bill in seconds

Our GST Tax Invoice template has all of this built in: GSTIN field, automatic CGST 2.5% + SGST 2.5% split, ₹ formatting and an A4 layout ready to download as PDF. Free, no sign-up.