GST Rules for Restaurants and Hotels: Detailed Explanation Central Board of Indirect Taxes and Customs (CBIC) made it clear where GST is on food and in restaurants and hotels. Here is the explanation in detail: 18 % GST Rules for Hotels and Restaurants 2025
Various Rates of GST for Food Items
- Normal Food (Non-AC Restaurants): 5% GST
- Roti, dal, rice, paratha, etc.
- Ice cream, packaged items, and Air Conditioned restaurants: 18% GST
- Even if it is not summer and AC isn’t running, GST is 18% on AC restaurants.
GST on Hotel Rooms
- Room tariff ≤ ₹7,500/day: 5% GST (No Input Tax Credit – ITC)
- Room tariff > ₹7,500/day: 18% GST (ITC available)
- Restaurants within such hotels will also impose 18% GST.
New Rule from April 2025
- Rather than room tariff, GST classification will be on the basis of actual revenue from the last financial year.
- If the average room revenue of a hotel was more than ₹7,500/day in the previous FY, then it will be a “specified premises,” eligible for 18% GST in the current FY.
Why Multiple GST Rates?
- Essential food items (such as meals) are charged lower (5%) since they are essentials.
- High-end items (ice cream, AC restaurants) and high-end services (high-tariff hotels) incur higher GST (18%).
This clarification ensures to prevent customers and businesses from confusion. Be sure to look at your invoice to observe the rates applicable with GST!
