DakaarGST is one of those topics where every restaurant owner has heard three different answers from three different people. The rules are actually simpler than they sound — but getting them wrong shows up directly on your bills, and bills are the first thing a tax officer looks at. Here is the whole picture in plain language.
The two rates that matter
Most standalone restaurants in India charge 5% GST (2.5% CGST + 2.5% SGST) — without input tax credit. That means you cannot claim back the GST you pay on rent, ingredients, equipment or services. The 5% rate applies whether the food is eaten at the table, taken away, or delivered.
The 18% rate applies mainly to restaurants inside hotels where the room tariff is ₹7,500 or more per night. Those establishments can claim input credit. If you are a standalone restaurant, a cloud kitchen, a café or a QSR — you are almost certainly in the 5% bucket.
Composition scheme: the 5%-of-turnover shortcut
If your annual turnover is under ₹1.5 crore, you can opt into the composition scheme and pay a flat 5% of turnover instead of charging GST per bill. Sounds easier — but composition dealers cannot show GST on customer bills at all, cannot sell through Swiggy/Zomato in most structures, and must print "composition taxable person, not eligible to collect tax" on every bill. Most growing restaurants stay on the regular 5% scheme for exactly this reason.
What a GST-compliant restaurant bill must contain
Each tax invoice you print needs, at minimum:
- Your legal/trade name, address and GSTIN
- A consecutive bill number and the date
- Item-wise description, quantity and value
- The taxable value and the GST split shown separately — CGST and SGST as two lines for sales within your state
- Whether tax is payable on reverse charge (almost never, for restaurants)
Two practical traps: hand-written bill books with duplicate numbers, and POS systems that print one merged "tax" line instead of the CGST/SGST split. Both are flagged in routine checks. Dakaar POS prints the full split automatically with your GSTIN and FSSAI number on every bill, and item-level GST groups (0%, 5%, 12%, 18%) so mixed bills — say, food at 5% and a bottled beverage MRP item — compute correctly on their own.
Service charge is not GST
Service charge is your own optional levy — it is not a tax, it must not be presented as one, and since the 2022 CCPA guidelines it must be genuinely voluntary. If you add it, show it as a separate line before tax, and train your team for the conversation when a guest asks for it to be removed. GST, in contrast, is not optional — and GST applies on the service-charge amount too, since it forms part of the bill value.
The three mistakes that actually trigger notices
- Sales on aggregators not matching GSTR filings. Since Swiggy and Zomato collect and deposit GST on restaurant services themselves (under section 9(5)), your books must separate dine-in revenue from aggregator revenue cleanly. If your POS lumps them together, your accountant is reconciling blind.
- Bill numbering gaps. Cancelled bills should exist in your records as cancelled — not vanish. An audit trail that explains every gap is your best defence.
- Charging GST without depositing it. Obvious, but it usually happens by accident: a bar bill template left at 18% from a previous setup, collecting more than you file.
Make the software do the remembering
None of this needs daily attention if your billing system is set up once, correctly: GST groups per item, CGST/SGST split printing, aggregator orders tracked under their own order type, cancelled bills kept with reasons, and a one-click GST summary for your accountant at month-end. Dakaar POS does all of this for a flat ₹8,990/year — no per-bill commission. Set the rates once and every bill after that is filed-ready.