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composition calculation for restaurants

Pradeep Reddy (27 Points)

20 December 2018

what is telhe GST percentage levy on composition for restaurants and how to calculate GST for restaurants composition

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jyoti bhagchandani (fresher) (595 Points)
Replied 20 December 2018

Restaurants are required to pay GST at a concessional rate of 5% on the turnover under Composition Scheme subject to following restrictions

Turnover not to exceed Rs 1.5 Crores (Rs 1 Crore in case of special category States)

Should not be engaged in any services other than restaurant (special exception carved out for services like interest and exempt services)

Restaurant cannot make inter-state outward supply of goods

Cannot supply any items exempt under GST.

They cannot supply goods through an e-commerce operator

Restaurants cannot avail any input tax credit

They cannot collect taxes from the customer

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CA Vijeta Nathani (Chartered Accountant) (505 Points)
Replied 20 December 2018

Restaurants are required to pay GST at a concessional rate of 5% on the turnover under Composition Scheme subject to following restrictions

Turnover not to exceed Rs 1.5 Crores (Rs 1 Crore in case of special category States)

Should not be engaged in any services other than restaurant (special exception carved out for services like interest and exempt services)

Restaurant cannot make inter-state outward supply of goods

Cannot supply any items exempt under GST.

They cannot supply goods through an e-commerce operator

Restaurants cannot avail any input tax credit

They cannot collect taxes from the customer.

Restaurants opting for the composition scheme must mention the words “composition taxable person, not eligible to collect tax on supplies” on the top of the bill of supply.

Hence, The calculation shall be made at 5% of the total Turnover. i.e. Suppose, if the Turnover of one quarter is INR 2 Lac; Then, 5% i.e. Rs. 10,000 Shall be Paid as GST. (Rs. 5000 CGST and Rs. 5000 SGST)