Is your restaurant overcharging in the name of GST? 5 things to keep in mind while paying tax


Cover Photo: President Pranab Mukherjee and PM Narendra Modi press buttons for the launch of Goods and Services Tax (GST) at midnight on Friday June 30, at the special ceremony in the Central Hall of Parliament in New Delhi. India’s biggest tax reform, GSTwill replace some 20 federal and state levies.(PTI Photo). 


Isaac Gomes(Note: Here's what you need to keep in mind while checking the tax breakdown on your restaurant bill. Our PM calls it Good and Simple Tax.  Is it? Only time will tell. Isaac Gomes, Church Citizens' Voice). | Written by: Ekta Handa

New Delhi, August 21, 2017 | UPDATED 11:01 IST


The Goods and Services Tax is still a big mystery for people around the country. Implemented on July 1, 2017, almost two months down the line people are still confused how GST is applied on different items.

One of the biggest concerns that consumers have in India is the application of GST when eating out. Many restaurants seem to charge tax according to their own whims and fancies.

Here are the few things to keep in mind while checking the tax applicable on your bill:

Picture for representation (Photo: Facebook/Jagdish Lade)

1. Service charge

Service charge that is charged by many restaurants is not mandatory to pay. Customers are entitled to refuse to pay Service Charge, which is not imposed by the government.

2. What is the applicable GST rates to restaurants?

Different eating outlets or restaurants have different GST rates.

  • For non-AC/non-alcohol serving hotels, it is 12%.
  • For AC/alcohol-serving hotels, it is 18%.
  • For luxurious or 5-star hotels, it is 18%

3. What is SGST and CGST?

Many consumers are confused between SGST and CGST and why is GST applied twice in a bill. Here's the explanation:

SGST stands for State Goods and Services Tax while CGST stands for Central Goods and Service Tax, implying that half of the tax you pay goes to the state treasury while the other half goes to the central government's treasury.

4. Is the restaurant you are eating in eligible to charge GST?

This may surprise you but not all restaurants and eateries are eligible to charge GST. Non-registered businesses are not allowed to charge GST. To check if the restaurant you're eating at is registered, you can check the GST number provided on the bill.

Furthermore, the GST number could be verified at

Goods & Services Tax – Search Taxpayer

* indicates mandatory fields

GSTIN/UIN of the Taxpayer


5. VAT vs. GST

Many consumers had posted this query online asking if it is legitimate to charge both GST and VAT. While eating out, GST is charged on food and the service, whereas VAT is applicable on alcohol.

Girl named GST in Rajasthan. Photo:

A newborn baby girl named GST in Rajasthan

To break it down, if a consumer's bill for food is Rs 500, a service charge of Rs 50 is charged and Rs 1000 is the amount for alcohol then GST will only be applied on Rs 550, while VAT will be applied on Rs 1000.

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