The question
1 answer
Practising chartered accountants at ERPCA · 24 Aug 2026
In short
Both routes cost you 5% with no input credit, so the choice is about paperwork, not tax.
Regular scheme: restaurant service is taxed at 5% without input tax credit (the 18%-with-credit option exists only for restaurants in "specified premises", meaning hotels with rooms above ₹7,500 a night). You collect 5% from dine-in customers, file GSTR-1 and GSTR-3B (quarterly under QRMP at your size) and cannot claim credit on supplies or kitchen equipment.
Composition scheme: available to restaurants up to ₹1.5 crore turnover, also at 5% (2.5% CGST plus 2.5% SGST), paid on turnover through quarterly CMP-08 and one annual GSTR-4. You cannot charge GST separately on the bill or make inter-state supplies, and the same no-credit rule applies. For a single-outlet restaurant it is simpler and the cash flow is identical.
App orders: since 1 January 2022 Swiggy and Zomato are liable under section 9(5) to pay the 5% on restaurant services supplied through them. You do not pay tax on those orders; report them in GSTR-1 table 14 (or the corresponding line in GSTR-4) as supplies through an e-commerce operator so your turnover reconciles. Composition restaurants can supply through the apps; the operators remit the tax either way.
One caution: packaged goods or merchandise sold alongside food (bottled drinks, sauces) are goods at their own rates under the regular scheme, and under composition they are taxed at the trader rate of 1%.
Next step
With 40% of revenue on the apps and no credit to lose, composition is the lighter option; opt in through CMP-02 before the quarter in which you want it to apply.
General guidance on the facts given, not an engagement. Law as on the date of the answer.
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