Restaurants are entitled to charge GST on service charge: MOF

The Minister of State, Shri Pankaj Chaudhary in the Ministry of Finance in a written reply to a question raised in Lok Sabha Stated, “Restaurants are entitled to charge GST on service charge.”

As per section 9 of the CGST Act, 2017, GST is levied on supply of goods or services on the value as determined under section 15 of the CGST Act, 2017. According to section 15 of the CGST Act, 2017, any amount charged by the supplier for anything done by the supplier in respect of supply of goods or services forms part of the value of service.

Supply of restaurant service other than at hotels/premises having room tariff above Rs 7500, is taxed at the rate of 5% without Input Tax Credit (ITC) and supply of restaurant service at hotels having room tariff above Rs 7500 per day is taxed at 18% with Input Tax Credit (ITC).