GST Registration for Restaurants, Cafes and Cloud Kitchens

Introduction

The food and beverage industry in India is booming. From standalone restaurants to cloud kitchens, from cafes to quick-service restaurants (QSRs), the sector is diverse and dynamic. The question that arises is: When do restaurants, cafes, and cloud kitchens need to register for GST?

This guide explains the GST registration requirements for food businesses, the applicable GST rates, the composition scheme, and the compliance obligations.

Legal Framework: Section 22 of the CGST Act, 2017

Threshold Limit for Service Providers

Under Section 22 of the CGST Act, 2017, a person supplying services is liable to be registered if their aggregate turnover in a financial year exceeds ₹20 lakh (₹10 lakh for special category states).

Aggregate Turnover

Aggregate turnover includes the value of all taxable supplies, exempt supplies, exports, and inter-state supplies of a person having the same PAN, aggregated across all states.

Inter-State Supply

Where a food business makes inter-state supplies — for example, through online food delivery platforms — registration is mandatory regardless of turnover.

GST Rates for Restaurants and Food Businesses

Standalone Restaurants, Cafes, and Cloud Kitchens

5% GST (without input tax credit) for standalone restaurants, cafes, and cloud kitchens. This rate applies to food and beverages supplied by these establishments.
5% GST applies to cloud kitchens and online food delivery services.

Restaurants Inside Hotels

5% GST (without ITC) for restaurants inside hotels with room tariff up to ₹7,500.
18% GST (with ITC) for restaurants inside hotels with room tariff above ₹7,500.

Composition Scheme

Restaurants and cloud kitchens with turnover under ₹1.5 crore can opt for the composition scheme. Under this scheme, a flat 5% GST is applicable, with simpler quarterly filing and no input tax credit.

When is Registration Required for Food Businesses?

A food business is required to register for GST in the following circumstances:

Aggregate Turnover Exceeds ₹20 Lakh: Where the aggregate turnover from food services exceeds ₹20 lakh in a financial year (₹10 lakh for special category states).
Inter-State Supply: Where the food business makes inter-state supplies — for example, through online food delivery platforms like Swiggy and Zomato — registration is mandatory.
Composition Scheme: Where the food business opts for the composition scheme, registration is mandatory regardless of turnover.

Procedure for GST Registration for Food Businesses

Step 1: Determine the Applicable Threshold

Determine whether the food business’s aggregate turnover exceeds the threshold limit or whether the business makes inter-state supplies.

Step 2: Gather the Required Documents

Gather the following documents:

PAN Card of the business or proprietor
Aadhaar Card of the proprietor or authorised signatory
Photograph of the proprietor or authorised signatory
Bank Account Details (cancelled cheque or bank statement)
Address Proof of the place of business (rent agreement, ownership proof, electricity bill)
FSSAI License
Digital Signature Certificate (DSC) (if applicable)

Step 3: Apply for GST Registration

Apply for GST registration in FORM GST REG-01 on the GST portal.

Step 4: Complete Aadhaar Authentication

Complete Aadhaar authentication for the primary authorised signatory.

Step 5: Respond to Notices

If the proper officer issues a notice in FORM GST REG-03 seeking clarification, respond in FORM GST REG-04 within the stipulated time.

Compliance Obligations for Food Businesses

Filing of Returns

A food business registered under GST must file the following returns:

GSTR-1: Details of outward supplies
GSTR-3B: Summary return and tax payment
GSTR-9: Annual return (if applicable)

Invoicing

The food business must issue tax invoices for all taxable supplies. The invoice must include the business’s GSTIN, the customer’s details (where applicable), the place of supply, and the applicable GST rate.

Payment of GST

The food business must pay GST at the applicable rate — typically 5% or 18%, depending on the nature of the establishment.

Input Tax Credit

Regular Scheme: Food businesses under the regular scheme can claim input tax credit on business expenses, such as rent, ingredients, and kitchen equipment.
Composition Scheme: Food businesses under the composition scheme cannot claim input tax credit.

Special Considerations for Cloud Kitchens

Multiple Brands, One Kitchen

A cloud kitchen may operate multiple brands from a single kitchen. In such cases, a single GSTIN can be used for all brands, provided the brands are owned by the same entity.

Online Food Delivery Platforms

Cloud kitchens that partner with online food delivery platforms like Swiggy and Zomato must register for GST. The platforms are required to collect tax at source (TCS) under Section 194-O of the Income Tax Act and Section 51 of the CGST Act.

FSSAI License

All food businesses, including cloud kitchens, must obtain an FSSAI license before commencing operations.

Best Practices for Food Businesses

Determine the Applicable GST Rate: Determine whether the business falls under the 5% or 18% slab.
Evaluate the Composition Scheme: Evaluate whether the composition scheme is beneficial based on turnover and ITC requirements.
Maintain Records: Maintain accurate records of all invoices, expenses, and GST payments.
File Returns Promptly: File returns within the prescribed deadlines to avoid penalties.
Seek Professional Assistance: Engaging a GST practitioner can help manage compliance efficiently.

Conclusion

Restaurants, cafes, and cloud kitchens are liable to register for GST once their aggregate turnover exceeds ₹20 lakh or where they make inter-state supplies. The applicable GST rate is 5% or 18%, depending on the nature of the establishment. The composition scheme offers a simplified compliance option for smaller food businesses. Timely compliance is essential to avoid penalties and maintain a seamless operation.

Running a restaurant, cafe, or cloud kitchen? Anuj Desai & Associates provides expert guidance on GST registration and compliance for food businesses. Contact us today.

Contact us:

Email: office@anujdesaiassociates.com
Phone: 9619456656
Website: https://anujdesaiassociates.com
LinkedIn: linkedin.com/in/ca-anuj-desai-122547230

Compliance GuideGST restaurants cafes cloud kitchensGST registration restaurantsGST registration cloud kitchensGST for restaurantsGST registration cafesGST restaurant registrationGST registration IndiaGST registration 2026GST registration guideGST registration consultantGST registration lawyerGST registration CAGST registration expertGST registration advisoryGST registration procedureGST registration lawCGST Act registrationGST registration rulesGST registration regulationsGST registration instructionsGST registration circularGST registration notificationGST registration updateGST registration newsGST registration case lawGST registration litigationGST registration remedyGST registration solutionGST restaurant registration processGST restaurant registration documentsGST restaurant registration complianceGST restaurant registration certificateGST restaurant registration GSTINGST restaurant registration portalGST restaurant registration step by stepGST restaurant registration guideGST restaurant registration advisoryGST restaurant registration expertGST cloud kitchen registrationGST composition scheme restaurantsGST 5 percent restaurantsGST 18 percent restaurantsGST Swiggy Zomato registrationGST food delivery registration