GST Registration for Restaurants & Hotels — Tariff Slabs, ITC & Composition

Restaurant and hotel GST isn't one flat rate — it depends on your model

Food & beverage and hospitality businesses face some of the most nuanced GST rate structures — standalone restaurants, hotel restaurants, room tariffs and banquet halls are all taxed differently, and getting the classification wrong means either overcharging customers or under-collecting tax that the department later demands with interest. We register your restaurant or hotel correctly from day one and set up billing so the right rate applies automatically.

Who needs this service

• Standalone restaurants, cafes, dhabas and cloud kitchens crossing ₹20 lakh turnover (services threshold)
• Hotels, guest houses and homestays with room tariffs, especially those near or above the ₹7,500/night slab
• Restaurants located inside hotels, where the applicable GST rate depends on the hotel's declared room tariff
• Banquet halls and event/catering businesses charging for both space and food
• Small eateries evaluating whether the Composition Scheme (5% flat, no ITC) makes sense versus regular GST

Documents required

• PAN and Aadhaar of proprietor/partners
• Shop/restaurant premises proof — rent agreement or ownership document with electricity bill
• FSSAI licence (required for GST registration verification in most states for F&B businesses)
• Trade licence/municipal licence for the establishment, if applicable
• Bank account details and photograph of proprietor/partners

Process & timeline

1. We assess your business type — standalone restaurant, hotel restaurant, or accommodation-only — to fix the correct GST rate structure
2. File REG-01 with the right SAC codes for restaurant/accommodation services
3. Decide between regular scheme and Composition Scheme (available to restaurants, not hotels above certain tariffs) based on your ITC needs
4. GSTIN issued in 3–7 working days; POS/billing software configured with correct tax rates

Restaurant GST rates — 5% without ITC vs 18% with ITC

Standalone restaurants (AC or non-AC, dine-in, takeaway or delivery) attract 5% GST with no Input Tax Credit on inputs — this has been the rule since November 2017. However, restaurants located within hotels where the declared room tariff is ₹7,500 or more per night attract 18% GST with full ITC available, since these are treated as "specified premises." Outdoor catering and standalone catering services are taxed at 18% with ITC. We identify exactly which bracket applies and configure your billing system to avoid mischarging customers.

Hotel room tariff — the ₹7,500 threshold that decides your rate

• Room tariff below ₹7,500/night — 12% GST with ITC available
• Room tariff ₹7,500/night and above — 18% GST with ITC available, and the property is classified as "specified premises" affecting the restaurant rate inside it too

Note: rate classification is based on the value of supply per unit per day (transaction value actually charged), so if you dynamically price rooms across seasons, the applicable slab can change month to month — we help set up your PMS/billing to reflect this correctly.

Composition Scheme for small restaurants

Standalone restaurants (not serving alcohol) with turnover up to ₹1.5 crore (₹75 lakh in some special category states) can opt for the Composition Scheme — paying a flat 5% of turnover with minimal compliance (quarterly CMP-08, annual GSTR-4) but no Input Tax Credit and no inter-state supply/e-commerce sales allowed. This is often ideal for small dine-in eateries with high margins on raw material but low ITC benefit anyway.

Why Tax Easy India

• We correctly classify your business between restaurant and hotel-accommodation rate structures — a frequent audit trigger when done wrong
• Composition vs regular scheme comparison based on your actual ITC on rent, raw material and equipment
• FSSAI-GST document coordination for faster registration approval
• Ongoing GSTR-1/3B or CMP-08/GSTR-4 filing so room tariff and menu pricing stay compliant as rates change seasonally