How It Works: The Mechanics of Dining Tariffs
Splitting corporate expenses or dining bills accurately requires an understanding of how hospitality taxation scales your base cost in India.
The 5% Hospitality GST
In standard standalone restaurants across India, the Goods and Services Tax (GST) is strictly capped at 5% (without Input Tax Credit). However, if the establishment is situated within a hotel with rooms priced above ₹7,500 per night, the GST legally escalates to an aggressive 18% slab.
Service Charge Legality
A "Service Charge" (typically 10%) is an independent restaurant-levied fee that functions as a mandatory tip. Recent consumer protection guidelines state that service charges are strictly voluntary. If the service is unsatisfactory, consumers possess the legal right to ask management to strike the service charge entirely from the final invoice before GST calculation.
How Bill Splitting Works
Split bills equally or by custom amounts. For restaurants, remember to include service charge (typically 10%) and GST (5%) on restaurant food before splitting. The total per person should include all charges.
Worked Example
A group of 5 friends at a restaurant: Food total ₹2,400. Service charge (10%) = ₹240. GST (5% on ₹2,640) = ₹132. Total bill = ₹2,772. Per person = ₹554.40.
Tips
- In India, service charge is now voluntary — you can legally refuse to pay it
- GST on restaurants is 5% without input tax credit for most restaurants
- Use UPI to split instantly — no more waiting for change or IOUs