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GST Registration for Restaurants

India’s economy is growing strongly and the introduction of GST will power growth for years to come. With urbanisation, the culture of eating out is increasing every day and becoming mainstream. In this article, we provide a detailed guide to GST registration for Restaurants.

Restaurants, like most businesses with a turnover of more than Rs.20 lakh, will require GST Registration in most states. Restaurants in special category states will require GST registration if the annual aggregate turnover crosses Rs.10 lakhs. Any restaurants below this turnover can opt-out from GST Registration, which shall nullify them from charging GST from customers.

FSSAI Registration

In addition to GST registration, all restaurants will require FSSAI registration from the Food Standard and Safety Authority of India. FSSAI registration is mandatory for all persons and entities involved in the food business.

Click here to read on GST Composition Scheme for Restaurants

Process of GST Registration

To obtain GST registration for a restaurant, you will have to complete the GST registration application in Form GST REG – 01. The GST registration process can be initiated on the GST Portal, by filling basic details like your mobile number and E-mail address and most importantly, your PAN. You have to enter the varied OTP’s sent to your mobile number and E-Mail address, followed by submission of documents, after which the application will be sent to the concerned authorities for verification. The authorities will verify your documents and provide GST registration certificate.

GST Rate for Restaurants

Stand-alone restaurants, air-conditioned or otherwise, will attract a rate of 5%. Hotels with room tariffs of an amount of less than 7500 will attract a rate of 5%, while tariffs equal to or more than that will attract 18% of GST.

Know more about GST rate for restaurants.

GST Composition Scheme

Restaurants can register under the GST composition scheme if the aggregated annual turnover received less than Rs.100 lakh. Restaurants registered under the GST composition scheme will have to pay GST at the rate of 5% of aggregate turnover, divided into 2.5% as SGST and 2.5% as CGST. Aggregate turnover will be computed on the basis of turnover on an all India basis and will include value of all taxable supplies, exempt supplies and exports made by all persons with the same PAN, but excludes inward supplies under reverse charge as well as central, State/Union Territory and Integrated taxes and cess. Further to it, restaurants availing this scheme needs to ensure that GST is charged on the reverse charge basis on any goods received from an unregistered supplier. Reverse charge is a mechanism where the tax applies to the receiver and not the supplier.