Restaurant GST Billing in India: A 2026 Compliance Guide

GST at the billing counter is where compliance is either quietly correct or quietly wrong for years. This guide covers the rates that apply to Indian restaurants in 2026, how to configure your POS, and the mistakes that trigger notices.

Current GST rates for restaurants

• Standalone restaurants (non-AC and AC): 5% GST without ITC.
• Restaurants inside specified premises (hotels with room tariff ≥ ₹7,500): 18% GST with ITC.
• Outdoor catering: 5% or 18% depending on venue.
• Packaged/MRP goods sold at counter: as per product HSN, not restaurant rate.

HSN codes and item mapping

Every item on your menu needs an HSN code. Prepared food is generally 9963. Packaged items follow the product HSN. Your POS must let you set HSN per item and print it on every tax invoice.

Invoice rules that trip owners up

• Tax invoice for B2B customers who share a GSTIN — split CGST/SGST or IGST correctly.
• Bill of supply for composition dealers — no GST charged.
• Sequential invoice numbers, no gaps, restarting each financial year.
• Round-off should show as a separate line, not silently adjust GST.

Composite vs regular scheme

Small restaurants under the composition scheme pay 5% flat on turnover, don't collect GST on the bill, and cannot claim ITC. Above the threshold, you must move to the regular scheme — plan the migration inside your POS a month in advance.

POS configuration checklist

• Correct GSTIN on every printed bill.
• Per-item GST rate and HSN code.
• CGST/SGST split for intra-state, IGST for inter-state (rare for dine-in).
• Daily GSTR-1 friendly export for your CA.
• Separate rate for MRP / packaged items.

18Flow ships with GST-ready templates for standalone restaurants, hotels and cloud kitchens — configured with your GSTIN and HSN codes during onboarding.