GST on Restaurant Bills in India: CGST, SGST, Service Charge and Round-Off
Short answer: Most standalone restaurants in India charge 5% GST on food bills without input tax credit, shown on the bill as 2.5% CGST plus 2.5% SGST. The bill should show your GSTIN, the taxable value, each tax line and the total. Service charge cannot be added by default under the CCPA guidelines of July 2022. Confirm your exact rate with your CA.
The basic structure of a GST restaurant bill
A restaurant bill builds up in a fixed order: item total, minus any discount, plus charges such as packing or delivery, gives the taxable value. GST is calculated on that taxable value and then split into its central and state parts. A small round-off brings the total to a whole rupee.
CGST and SGST: why the tax is split
When you sell within your own state, GST is shared between the centre and the state. So a 5% rate appears as two equal lines: 2.5% CGST (central) and 2.5% SGST (state, or UTGST in a union territory). For a restaurant serving guests on site, supply is almost always intra-state, so you will see CGST plus SGST, not IGST.
Which GST rate applies?
For most standalone restaurants, including takeaway and delivery from the restaurant, the rate is 5% without input tax credit. Different rules can apply to restaurants inside hotels, outdoor catering and some other cases, and rates have been revised over the years. Your chartered accountant should confirm the rate for your outlet, and your POS should let you set it rather than hard-coding it.
What your bill should show
- Restaurant name, address and GSTIN
- Bill number and date
- Items, quantities and prices
- Discount, if any, before tax
- Packing or delivery charges
- Taxable value, CGST and SGST amounts (with rates)
- Round-off and the final amount
- Payment mode: cash, card, UPI or wallet
Service charge: what the rules say
In July 2022 the Central Consumer Protection Authority (CCPA) issued guidelines saying restaurants cannot add a service charge automatically or by default, cannot collect it under another name, and must tell guests it is voluntary. If you show a service charge, make it optional and clearly labelled, and be ready to remove it at the guest's request. Your POS should make this a one-tap toggle per bill.
Round-off
GST maths often produces paise. Round-off adjusts the total to the nearest rupee and should appear as its own line, so your sales report reconciles exactly with what was collected.
How DeskoPOS handles it
DeskoPOS applies discounts, service charge, packing and delivery fees, the CGST/SGST split and round-off automatically, then records the payment mode for the day-end report. See it on a sample bill in the live demo. Related: day-end closing checklist.
This guide is general information, not tax advice. Rates and rules change; confirm with a qualified professional for your outlet.
Frequently asked questions
What is the GST rate on restaurant food in India?
For most standalone restaurants it is 5% without input tax credit, split as 2.5% CGST and 2.5% SGST. Restaurants in some hotels and caterers can fall under different rules, so confirm with your CA.
Why does my restaurant bill show both CGST and SGST?
Because the sale is within one state, GST is shared equally between the central government (CGST) and the state (SGST).
Is service charge mandatory at restaurants in India?
No. Under the CCPA guidelines of July 2022, a service charge cannot be added automatically or by default and must be voluntary for the guest.