This is the version an owner needs to run the business, not the version a tax professional needs to file. Rates and thresholds change; confirm anything here with your CA before acting on it.
The choice that matters: 5% or 18%
Most standalone restaurants charge 5% GST on food and cannot claim input tax credit on what they buy. Restaurants inside hotels where room tariff is above ₹7,500 a night charge 18% and can claim credit. The 5% rate looks simpler and usually is, but it means the GST on your rent, equipment, aggregator commission and packaging is a cost, not a credit. For a cloud kitchen paying 18% GST on a 25% commission, that is 4.5% of aggregator sales that never comes back.
Composition scheme
Restaurants with turnover up to ₹1.5 crore can opt for the composition scheme: 5% paid out of pocket, no GST charged on the bill, quarterly filing, no input credit, and no supplying through aggregators or across states. It suits a single dine-in outlet with no online presence. The moment you list on Zomato or Swiggy you are out of it.
What the aggregator pays for you
Since January 2022, the platform is treated as the supplier of restaurant service for orders through it and pays the 5% GST itself. You still report the sales in your returns, but you do not pay the tax on them twice. Separately, the platform deducts tax at source under the income tax act on your gross sales; that deduction is yours to claim, and it only gets claimed if it is posted to the right ledger.
Alcohol, packaging and service charge
- Alcohol is outside GST; it attracts state VAT. Bills with food and liquor need both taxes, on the right lines.
- Packaging charged separately to the customer is taxed at the rate of the food it accompanies when bundled; sold on its own it is taxed as goods.
- Service charge is not a tax. It is part of your revenue and GST applies to it at your rate.
What your CA needs from you, monthly
| Item | Source | Why it matters |
|---|---|---|
| Sales register, by rate | POS day-close reports | GSTR-1 outward supplies |
| Aggregator sales, separately | Payout statements | Reported as supplies through an e-commerce operator |
| Purchase register with GSTIN | Supplier bills, posted | Input credit if on 18%; expense if on 5% |
| Credit notes and cancellations | POS and aggregator refunds | Reduce taxable value in the right period |
| Bank statement | Bank | Reconciliation; the CA will ask anyway |
If these five come out of one system on the first of the month, GST is a filing. If they come from the POS, a spreadsheet, a WhatsApp folder of bills and the bank app, GST is a project, every month, forever.
Figures are rules of thumb or statutory rates at the time of writing; confirm anything tax-related with your CA.