GST Rates for Restaurant Services

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🔥 GST & Restaurant Services: A Fresh Take with Swiggy, Zomato & Compliance! 🍔 ✅ What constitutes 'Restaurant Service'? 🟢 As per Notification No. 20/2019-CT (Rate), ‘Restaurant Service’ refers to the offering of food and beverages for consumption on the premises or taken away, including services provided by restaurants, messes, canteens, etc.

✅ GST Rates for Restaurant Services ➡️ 5% without ITC - Standard case for regular restaurant services ➡️ 18% with ITC - Applied when the restaurant operates in specified premises (e.g., hotels with room tariffs exceeding ₹7,500 per day)

✅ Who is Responsible for GST When Using Swiggy/Zomato? 🟢 Clarifying the GST payer ➡️ If the restaurant is not in specified premises: 🔹 The E-Commerce Operator (ECO) is responsible for collecting GST under Section 9(5) ➡️ If the restaurant is in specified premises: 🔹 The restaurant itself must pay GST directly (the ECO does not assume liability)

✅ Filing GST Returns 🟢 Reporting requirements for restaurants using ECOs ➡️ For Restaurants Selling via ECO (non-specified premises): 🔹 GSTR-1: Table 8 for taxable supplies covered by ECO under Section 9(5) 🔹 GSTR-3B: Table 3.1(c)

➡️ For Direct Sales from Restaurants (Dine-in/Own App): 🔹 GSTR-1: Table 4 (B2C) or Table 5 (B2B) 🔹 GSTR-3B: Table 3.1(a) ➡️ For ECOs like Zomato/Swiggy: 🔹 GSTR-3B: Report taxable supplies (restaurant services) and remit GST in cash 🔹 GSTR-1: Table 7A(1) or Table 4A for accounting purposes

✅ FAQs from CBIC Circular No. 167/23/2021 ➡️ Who issues invoices for restaurant services via ECO? 🔹 Invoices are issued by the ECO, not the restaurant. ➡️ Do ECOs require separate GST registration for Section 9(5) services? 🔹 No, their existing ECO registration suffices. ➡️ Can ECOs utilize ITC for paying GST on restaurant services? 🔹 No, payments must be made in cash.

➡️ Is GST applicable if the restaurant is unregistered or under a composition scheme? 🔹 Yes, ECO is liable to pay GST regardless of the restaurant's registration status. ➡️ Should ECO consider it a reverse charge mechanism? 🔹 No, since ECO is not the recipient; GST falls under a forward charge as per Section 9(5).

✅ Practical Illustration 🟢 How it operates in practice ➡️ For example, Domino's sales through: 🔹 Own App – GST is charged and remitted by Domino's 🔹 Swiggy – Swiggy generates the invoice and pays 5% GST in cash ➡️ Domino's reports sales made through Swiggy in GSTR-1 (Table 8) and GSTR-3B (3.1(c))

✅ Additional Considerations for Restaurant Sales 🟢 Key points to keep in mind ➡️ The rise of online food delivery has changed consumer behavior, increasing the importance of compliance with GST regulations for e-commerce transactions. ➡️ E-commerce platforms must develop effective communication channels with restaurants to streamline the invoicing process and ensure timely GST remittance.