GST Billing for Restaurants: Complete Guide

GST for Restaurants: What You Actually Need to Know

GST has been in place since 2017, but many restaurant owners still aren't sure which rate applies, what a compliant bill must show, or what to file. This guide explains it simply — and shows what your billing software should handle for you. GST rules change through government notifications, so confirm the details for your business with your accountant.

Compliance Starts at the Bill

Many owners think of GST as something the accountant handles at month-end. In reality, compliance starts with the first bill of the day: every invoice needs the correct rate, the correct CGST/SGST split and the required details. A wrong rate applied for a whole month means real reconciliation work, and possible penalties, at filing time.

The Two Key Restaurant GST Rates

5% GST (most common)

• •Standalone restaurants, and restaurants in hotels where the room tariff is below ₹7,500 a night
• •No Input Tax Credit (ITC)
• •Covers dine-in and takeaway

18% GST

• •Restaurants in hotels where the room tariff is ₹7,500 a night or more
• •Input Tax Credit is available
• •Also applies to outdoor catering

Alcohol Liquor is outside GST and taxed under state VAT, which varies by state. Restaurants serving alcohol must bill it separately.

What Must Appear on a GST-Compliant Restaurant Bill

• •Legal name and address of the restaurant
• •GSTIN
• •Sequential, unique invoice number
• •Invoice date
• •Customer name and GSTIN for B2B bills
• •Description of items with SAC/HSN code
• •Taxable value before GST
• •CGST and SGST shown separately for intra-state supply
• •IGST where applicable, such as inter-state catering
• •Total invoice value

SAC and HSN Codes for Restaurants

Food service is a service, so restaurants use SAC codes:

• •SAC 996331 — Restaurant services, including delivery
• •SAC 996332 — Catering services
• •SAC 996333 — Other food and beverage services

Packaged items sold as goods (not prepared by the restaurant) use HSN codes.

Common GST Mistakes to Avoid

1. Packaging charges taxed wrongly Takeaway packaging charges usually follow the same GST rate as the food — 5% for a standard restaurant.

2. Not registering GST registration is mandatory once annual turnover crosses ₹20 lakh (₹10 lakh in special category states). Skipping it leads to penalties.

3. Wrong CGST/SGST split At 5%: CGST 2.5% + SGST 2.5%. At 18%: CGST 9% + SGST 9%. Both must be shown separately.

4. Service charge shown as a tax Service charge is voluntary and cannot be added automatically. If a guest pays it, GST applies to it — and it must never be labelled as a government levy.

What GST Billing Software Must Get Right

Manual GST calculation, or trusting each cashier to apply the right rate, creates errors that multiply across hundreds of bills. Check these before trusting any billing software:

• •Does it split CGST/SGST (or IGST) automatically and correctly?
• •Does every invoice include GSTIN, invoice number, date and SAC codes?
• •Is the GST rate a setting you can change, not hardcoded?
• •Can you export a tax summary for any date range?
• •Does it handle items at different tax rates on the same bill?

When the rate is a setting, a government change is a few minutes' work for an admin, not a wait for the vendor's next update.

Filing Your GST Returns

Regular scheme

• •GSTR-1 (monthly or quarterly) — Outward supplies
• •GSTR-3B (monthly) — Summary return and tax payment

Composition scheme (turnover up to ₹1.5 crore)

• •GSTR-4 (annual)
• •CMP-08 (quarterly statement and payment)

Good software gives your accountant the sales and tax totals for these returns directly, instead of totalling hundreds of bills by hand.

How RasoeeCloud Handles GST

• •Set your GST rate once and it applies to every bill
• •CGST and SGST shown separately on every receipt
• •SAC codes on invoices
• •Different tax rates per item where needed
• •GST reports for filing GSTR-1 and GSTR-3B, exportable for any date range

Our onboarding team sets up your GST rate, GSTIN and invoice format during setup. For help, contact support@rasoeecloud.com.

Related reading: Best Restaurant Billing Software in India, Restaurant Billing Mistakes That Cost Money and Packaging & Delivery Charges on Bills.

Start a 7-day free trial at rasoeecloud.com and check a sample invoice against your own GST requirements.