Does a restaurant have to issue a GST invoice for every bill?

A GST-registered restaurant must issue a tax invoice for taxable supplies, including to unregistered walk-in customers, though a consolidated invoice is permitted for small-value supplies in certain circumstances. The practical answer for a restaurant is to issue a properly numbered invoice for every bill — it is simpler than tracking exceptions and it keeps the sequence clean.

Can restaurant invoice numbers restart every year?

The requirement is a consecutive series unique within a financial year, so starting a fresh series at the beginning of a financial year is normal. What causes problems is a series that restarts mid-year, runs separately per billing device, or skips numbers.

How should a discount be shown on a restaurant GST invoice?

A discount given at the time of sale should reduce the taxable value, which means it needs to be applied to the item lines before GST is computed rather than deducted from the final total. Each line then carries its own reduced taxable value and its own tax amount.

Is GST charged on service charge?

Service charge is a restaurant levy rather than a tax, and where it is levied it generally forms part of the value of the supply. Because guidance on levying it at all has been contested, treat it carefully and take your accountant's view — but never present it on a bill in a way that resembles a government tax.

GST billing for restaurants, in practice

11 August 20268 min read

Most restaurant GST problems are not tax problems. They are billing problems that only become visible three months later, at filing time.

The GST that a restaurant charges is one of the simpler parts of Indian indirect tax. The trouble almost never comes from the rate. It comes from invoices: numbering that resets or skips, tax computed on the wrong base after a discount, HSN or SAC codes missing, and a month of bills that cannot be reconciled against the return because the POS and the register disagree.

The rate, in outline

Standalone restaurants in India are generally taxed at a concessional rate on food and beverage service, charged as CGST plus SGST — and crucially, without input tax credit on purchases. Restaurants located inside hotels above a specified room-tariff threshold fall into a higher rate bracket where input tax credit is available. Alcohol is outside GST entirely and is taxed under state excise and VAT, which is why a bar bill carries two different tax treatments on one piece of paper.

Two consequences follow, and they matter more than the exact percentages:

No input tax credit means GST on your purchases is a cost, not a wash. The tax you pay on packaging, ingredients and equipment does not come back. It belongs in your food-cost maths, not outside it.
Alcohol has to be separated at the line level. A billing system that applies one tax rate to the whole bill will produce a wrong invoice for any table that ordered a drink.

What a compliant tax invoice has to carry

If you are GST-registered, the invoice you hand a guest is a legal document, not a receipt. It generally needs:

Your registered business name, address and GSTIN.
A consecutive invoice number, unique within the financial year, with no gaps and no reuse.
The date of issue.
A description of each item, quantity and taxable value.
The HSN or SAC code, where applicable to your turnover.
The rate and amount of CGST and SGST shown separately, not as one combined figure.
The total, in figures.

The sequential numbering requirement is the one that trips up restaurants most often, and it is entirely a software problem. If your billing system numbers invoices per device, or restarts numbering when you reinstall it, or lets a cancelled bill silently consume a number, you will have a sequence that cannot be explained. Numbering should be issued centrally, in one series, and a cancelled invoice should remain in the series as a cancelled invoice rather than disappearing.

Discounts and the taxable value

A discount given at the time of sale and shown on the invoice reduces the taxable value. That sounds obvious and is where a large share of restaurant billing errors live, because it means a discount cannot be applied after tax as a round number off the total — it has to be applied to the line values, with tax then computed on what is left.

For a bill with several items at different prices, the discount has to be spread across those lines so each line has its own taxable value. Software should do this and show it. If your system just subtracts ₹100 from the grand total, your per-line taxable values no longer add up to the invoice, and your GST report will not reconcile.

Service charge is not a tax

Service charge is a charge the restaurant levies, not a government levy, and consumer guidance in India has been explicit that it cannot be added automatically or made mandatory. Whatever you decide about levying it, it must never appear on a bill in a way that a guest could mistake for GST. Keep it a clearly separate, clearly labelled line.

The five billing mistakes that cost the most

Invoice numbers that reset or skip. Usually caused by per-device numbering or a reinstall. Central numbering fixes it permanently.
Discounts applied after tax. Produces per-line taxable values that do not sum to the invoice total.
No line-level tax split. Fine until the first table orders alcohol, then wrong every time.
Cancelled bills vanishing. A cancellation should be recorded, with a reason and a person attached, not deleted.
Reports built from orders instead of invoices. An order is a working document; the invoice is what you file against. They diverge the moment anything is cancelled or refunded.

What to check in your own system tonight

Three checks, ten minutes:

Pull the last fifty invoice numbers. Is the sequence unbroken?
Ring up a two-item bill with a discount, and check whether the two taxable values plus tax equal the total on the printed invoice.
Open your GST report for last month and compare the total taxable value against your sales report. If they differ, find out why before your accountant does.

KhaoPiyo issues invoice numbers centrally in one sequence, splits CGST and SGST per line, allocates discounts proportionally across lines before computing tax, and produces a GST report on an invoice basis — the details are on the GST billing page. Whatever you use, run the three checks above against it.