What should restaurant billing software do for GST in India?

The key points

• Most stand-alone restaurants charge GST at five per cent without input tax credit; the higher rate with credit applies only to specified premises.
• Restaurants on the composition scheme issue a bill of supply and cannot collect tax from diners.
• Orders placed through food delivery apps carry GST paid by the app, so they must not be taxed twice in your books.
• E-invoicing covers business-to-business invoices above a turnover threshold, not the bill a diner takes home.

Which GST rate applies to a restaurant bill?

Since November 2017, a stand-alone restaurant, air-conditioned or not, charges GST at five per cent on restaurant service, and it cannot claim input tax credit on what it buys to provide that service. Takeaway and parcel orders sit under the same rate. The exception is a restaurant inside a hotel that counts as a specified premises, which charges 18 per cent and can claim credit.

The definition of specified premises changed from April 2025. It now turns on the actual value charged for any unit of hotel accommodation in the previous financial year, above seven thousand five hundred rupees per unit per day, or on a hotel choosing to declare itself a specified premises.

For billing software, this means the rate is a setting tied to the outlet and the financial year, not something cashiers pick per bill. A hotel group with several outlets may have different answers for different premises, and the software should hold that per outlet, so a menu shared across outlets does not carry the wrong tax.

What has to appear on the bill?

A registered restaurant on the regular scheme issues a tax invoice: your legal name and GSTIN, a serial number that runs without gaps for the financial year, the date, the items and quantities, the taxable value, and the central and state tax shown separately. Software should make the serial number impossible to reuse or skip, because a cancelled bill still needs a trace rather than a deleted row.

A restaurant that has opted for the composition scheme works differently. CBIC's composition FAQ says restaurant service is the one service allowed under the scheme, that a composition taxpayer issues a bill of supply instead of a tax invoice, and that the words "composition taxable person, not eligible to collect tax on supplies" must appear at the top. The software should switch the whole bill format, not just set the tax to zero.

If you are weighing a billing product against a custom build, the billing software comparison framework covers features beyond tax, and the restaurant POS pricing guide covers what drives cost.

• Regular scheme: tax invoice with CGST and SGST shown separately
• Composition scheme: bill of supply with the mandatory heading and no tax collected
• Both: gap-free serial numbers and a cancellation trail

How should delivery-app orders be handled?

From 1 January 2022, restaurant service supplied through an e-commerce operator has been notified under section 9(5) of the CGST Act, which makes the app liable to pay the GST on those orders. CBIC Circular 167/23/2021 sets out how this works. The restaurant still records the sale, but it should not charge and deposit GST on the same order again.

In practice, billing software needs an order source on every bill. Dine-in, takeaway and orders from your own website are taxed by you; orders that arrive through a delivery app are recorded without your output tax. Mixing them in one total is the most common reason a restaurant's GST return and its sales report disagree. Our page on ordering on your own website versus delivery apps covers the commercial side of that split.

Does a restaurant need e-invoicing?

E-invoicing means reporting an invoice to an Invoice Registration Portal and receiving an Invoice Reference Number and a QR code before issuing it. Since 1 August 2023 it applies to taxpayers whose aggregate turnover in any preceding financial year since 2017-18 is five crore rupees or more, counted at PAN level.

It covers business-to-business invoices, credit and debit notes, supplies to SEZs and exports. The bill a diner pays at the table is a business-to-consumer bill and is not reported for an IRN. Where it matters for a restaurant is corporate catering, event orders and any bill raised to a company that gives its GSTIN. If your turnover is above the limit, those invoices are not valid without an IRN.

Good billing software asks for a GSTIN at checkout, routes only those bills through e-invoicing, and stores the IRN and QR code against the invoice so a reprint matches what was reported.

What records should the software keep for GST?

Your return is built from these records, so the software should produce them without a spreadsheet in between: sales by tax treatment, delivery-app sales kept apart, cancellations and refunds with reasons, and a daily summary per outlet. Restaurants on the regular scheme also keep stock accounts, which is where inventory and purchasing records come in.

A system built around how your counter runs, like the restaurant POS software we build, records this during service rather than after closing. If you would rather keep an existing product, check its GST settings against this page before you renew.

How GST treatment changes by situation