GST on restaurants — the rules
Restaurants fall into several GST brackets depending on their setup and what they serve.
Standalone restaurants (dine-in and takeaway, both AC and non-AC): 5% GST with no Input Tax Credit (ITC). The 5% is a concessional rate — you cannot claim GST paid on rent, utilities, or ingredients.
Restaurants located inside hotels where room tariff is ₹7,500 or more per night: 18% GST with ITC available. You can claim input tax credit and charge the standard 18%.
Outdoor catering: 5% GST without ITC (for most), or 18% with ITC at hotels with premium room tariffs.
Alcohol and aerated drinks: 18% GST (excluding state VAT on alcohol, which varies by state).
Packaged food items sold at the restaurant (like a bottled drink or packaged sweet): their own GST rate (usually 12% or 18%).
Service charge rules
As per the Central Consumer Protection Authority guidelines (July 2022), restaurants cannot automatically levy a service charge. It must be voluntary. The bill must clearly state that service charge is optional and that the customer can decline it.
InvoiceForge handles this with a toggle: turn on "Service Charge" and it is added as a separate line with the mandated disclaimer. Turn it off and the charge does not appear. When on, the customer-facing invoice has "Service charge is voluntary — please inform us if you wish to remove it" in small text.
Service charge is taxable at the same rate as the food (5% or 18%) — it becomes part of the taxable value.
What a good restaurant bill contains
Restaurant name, branch (if multi-location), and GSTIN prominently at the top.
Bill number and table number. Optional: waiter name or order-taker ID for staff accountability.
Timestamp — date and time of bill.
Itemised list: dish name, quantity, unit price, amount. Group by course if it makes sense (starters, mains, desserts).
Subtotal before tax and service charge.
Service charge (if applicable) — clearly marked optional.
CGST + SGST breakup (5% becomes 2.5% + 2.5%).
Alcohol items get separate CGST + SGST at 9% + 9% (or IGST 18% if interstate, rare for restaurants).
Grand total in bold.
Payment mode. Accept UPI, card, cash. InvoiceForge prints a QR code that locks the amount, so the customer pays the exact total via GPay, PhonePe, or Paytm.
Footer: restaurant phone, UPI ID, "Thank you — do visit again!", Google review QR.
Practical billing workflow
At the counter or table, open InvoiceForge. Tap saved menu items — rice, dal, roti, dessert — and quantity adjusts with a plus-minus. Items pre-configured with their GST rates mean you never compute tax manually.
Before printing, ask the customer: service charge yes or no? GST toggle on (if you are registered).
Hit Print. Bill prints on your thermal printer in 2 seconds. Customer pays by scanning the UPI QR or handing cash. You mark as Paid and move to the next table.
At end of day, the dashboard shows total sales, top-selling items, peak hours, and payment mode split. You know exactly what to restock and which item is your star.
Menu engineering for better margins
Modern bills are not just receipts — they are data. InvoiceForge automatically tracks which items sell most on which days and hours. Use this to:
Push high-margin items during slow hours with combos.
Retire items that rarely sell but clog your kitchen and supply chain.
Spot which waiter upsells best — the bill ties to the server if you tag it.
Know your busiest day — staff that shift better.
Set a target ticket size and track how often you exceed it.