Restaurant & Hospitality Compliance Evaluator
Evaluate 5% no-ITC vs 18% hotel GST rate eligibility, model Section 9(5) Swiggy/Zomato delivery tax splits, calculate mandatory Section 17(2) Rule 42 common ITC reversals on alcohol sales, and project Section 35AD cold chain deductions. Computations execute 100% locally in your browser with zero server data storage under the DPDP Act 2023.
Operational & Revenue Parameters
Determines GST rate classification under Notification 11/2017-CT(R).
Declared room tariff above ₹7,500 triggers 18% GST with full ITC.
Dine-in, takeaway & delivery food
Turnover ordered via delivery apps
Non-GST supply under State VAT
GST paid on rent, electricity, POS, security
Capital expenditure on cold storage or warehouse (Sec 35AD)
Statutory Diagnostics
Live Audit SimulationMandatory 5% Dining Rate
Standalone dining cannot opt for 18% with ITC. Inward tax on rent, equipment, and fit-outs is non-creditable.
E-Commerce Platform Split
Under Section 9(5), the ECO collects and deposits 5% GST in cash on app orders.
Liquor Non-GST Apportionment
Section 17(2) mandates reversing inward GST on shared rent, power, and overheads for alcohol sales.
Applies to cold storage facilities and warehousing. Form 3CE electronic audit required.
Section 35AD 100-bed write-off, Room Rent GST & Doctor TDS.
Section 10(23C) ₹5 Cr limit, Form 10B/10BB audit, and GST Entry 66.
Statutory Framework for Restaurants & Hospitality Businesses
1. The 5% No-ITC Mandate vs 18% Hotel Specified Premises
Under Notification No. 11/2017-Central Tax (Rate) as amended by Notification No. 20/2019-CT(Rate), standalone restaurants, cafes, and cloud kitchens are statutorily restricted to 5% GST without Input Tax Credit. Inward GST paid on commercial leases, kitchen fit-outs, equipment, and royalty cannot be claimed, representing a direct operational cost. However, restaurants located in hotel premises with any room having a declared tariff exceeding ₹7,500 per day ("specified premises") must levy 18% GST with full ITC eligibility.
2. Section 9(5) E-Commerce Operator (ECO) Reporting Discipline
Effective January 1, 2022, Notification No. 17/2021-CT(Rate) brought restaurant services under Section 9(5) of the CGST Act. Swiggy, Zomato, and other ECOs are deemed suppliers responsible for collecting and discharging 5% GST in cash on app orders. Restaurants must report such sales under Table 3.1.1(ii) of Form GSTR-3B and Table 8 of GSTR-1 as supplies made through ECO, preventing erroneous double taxation and automated notice issuance under Section 73/74.
3. Alcoholic Liquor Apportionment & CGST Rule 42 ITC Reversal
Alcoholic liquor for human consumption remains outside the constitutional remit of GST under Article 246A and is subject to State Excise and VAT. Under Section 17(2) read with Rule 42 of the CGST Rules, 2017, non-GST supplies are treated as exempt supplies for ITC apportionment. Multi-cuisine venues serving alcohol must compute proportionate reversals of common input taxes (commercial rent, electricity, maintenance, POS software) on a monthly basis, with final annual true-up before November 30.
4. Section 35AD Capex Incentives for Cold Chain Facilities
F&B businesses investing in post-harvest agricultural infrastructure, cold chains, or warehousing facilities for agricultural produce can claim a 100% upfront capital write-off under Section 35AD of the Income-tax Act, 1961 (and Section 35AD of the 2025 Act). An electronic audit in Form 3CE by an independent CA with UDIN is legally mandatory to validate asset capitalization and depreciation surrender.
Require Hospitality GST Structuring or Rule 42 Audit?
Consult our Hospitality Practice Desk for Section 9(5) Swiggy/Zomato reconciliations, liquor VAT reversals, and FSSAI audits.