Understanding GST for Restaurants and Hotels
GST (Goods and Services Tax) has simplified taxation in India, but for restaurant and hotel owners, understanding the correct tax slabs and compliance requirements can still be confusing. This guide breaks it all down.
GST Rates for Restaurants
Standalone Restaurants (Non-AC & AC)
- 5% GST — This is the standard rate for standalone restaurants, whether they are air-conditioned or not.
- No Input Tax Credit (ITC) is available at this rate.
Restaurants Inside Hotels (Room Tariff > ₹7,500)
- 18% GST — Restaurants located within hotels where the room tariff exceeds ₹7,500 per night must charge 18% GST.
- ITC is available at this rate, which means these restaurants can claim credit on their input purchases.
Outdoor Catering
- 5% GST without ITC for most catering services.
- 18% GST with ITC for catering provided by hotels with room tariffs above ₹7,500.
What Must Appear on a GST Invoice?
Every restaurant bill must include:
- Restaurant Name & Address
- GSTIN (GST Identification Number)
- Invoice Number (unique, sequential)
- Date of Issue
- Customer Name (for B2B invoices above ₹2.5 lakh)
- HSN/SAC Code — SAC 996331 for restaurant services
- Tax Breakdown — CGST and SGST (or IGST for inter-state)
- Total Amount
Common GST Mistakes Restaurants Make
- Not splitting CGST and SGST on the invoice
- Charging service charge and calling it GST — Service charge is NOT a tax
- Not issuing proper invoices for takeaway and delivery orders
- Missing HSN/SAC codes on invoices
How RextroX Automates GST Billing
RextroX billing software handles all of this automatically:
- Auto-calculates CGST, SGST, and IGST based on your location
- Supports multiple tax slabs (5%, 12%, 18%) on the same bill
- Prints GSTIN and SAC codes on every invoice
- Generates GSTR-1 ready reports for your accountant
- Handles inclusive and exclusive pricing seamlessly
Conclusion
GST compliance shouldn't be a headache. With RextroX, every invoice is automatically tax-compliant, saving you time, reducing errors, and keeping you safe during audits.
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