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For a restaurant order placed through a food-delivery app, the app’s e-commerce operator (ECO), not the restaurant, pays GST on the notified restaurant-service portion from 1 January 2022. The ECO issues that customer invoice. The restaurant must still count the app order value in aggregate turnover, keep the underlying records, and handle any separate supplies—such as goods or services outside restaurant service—under their own GST rules.
The legal rule that changed app orders
Section 9(5) of the Central Goods and Services Tax Act shifts the tax payment obligation for notified services to the e-commerce operator. CBIC Circular 167/23/2021-GST, dated 17 December 2021, confirms that restaurant service supplied through an ECO is covered from 1 January 2022. Its operative rule is that “the tax on supplies of restaurant service supplied through e-commerce operators shall be paid by the e-commerce operator.”
This is a liability shift, not a removal of the sale from the restaurant’s books. The app collects the customer’s order, the ECO accounts for GST on the restaurant-service value, and the restaurant continues to maintain sales, cancellation, refund and settlement records. An unregistered restaurant does not make the ECO’s section 9(5) liability disappear; the operator still pays GST on the notified restaurant service. The restaurant’s supplies through the app nevertheless count toward aggregate turnover for threshold and other statutory purposes.
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The section 9(5) treatment applies to the restaurant-service supply. It does not automatically cover every line that appears in an app checkout or settlement statement. CBIC’s circular keeps supplies other than restaurant service with the supplier responsible for those supplies and preserves the relevant section 52 treatment for them.
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| Supply appearing in or connected with an app order | Who is liable for GST | Who issues the customer invoice | TCS position |
|---|---|---|---|
| Restaurant service notified under section 9(5) | The ECO pays GST | The ECO | No TCS on this portion when the ECO pays under section 9(5) |
| A separate good or service outside restaurant service | The supplier making that supply, under the rules for that supply | That supplier | Section 52 TCS can apply where its conditions are met |
| A platform, delivery or other service supplied separately by the operator | The operator, if it is the supplier of that service | The operator | Classify the supply and apply the applicable rule; section 9(5) does not automatically cover it |
A delivery charge shown by an app therefore needs to be read with the invoice and contractual description. Do not assume that every “delivery fee,” convenience fee or platform charge is restaurant service, and do not apply the restaurant-service rule to a separate supply merely because it appears on the same checkout screen.
Which GST rate applies to the restaurant service?
CBIC’s current rate schedule, accessed in 2026, lists restaurant service other than at specified premises at 2.5% CGST plus 2.5% SGST—5% in total. That entry carries a condition that input tax credit on goods and services used for the service is not taken.
| Premises classification | Rate listed by CBIC | Input-tax-credit condition | Action for the owner |
|---|---|---|---|
| Restaurant service other than at specified premises | 2.5% CGST + 2.5% SGST (5% total) | Do not take ITC on goods and services used for that service | Use the 5% entry only after confirming the premises classification and current conditions |
| Restaurant service at specified premises | 18% | The cited rate entry must be checked with its current conditions | Confirm whether the premises is “specified” before relying on the 5% rate |
The 5% figure is not a universal rate for every food-related line. It is the listed rate for the ordinary, non-specified-premises restaurant-service entry and is separate from GST that may apply to platform or delivery services. Premises classification and the rate schedule in force for the relevant tax period should be verified before a return is filed.
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Do you need GST registration?
The ECO must register
CBIC’s sectoral FAQ states that an e-commerce operator must register regardless of turnover. This obligation belongs to the operator and is distinct from the restaurant’s registration position.
A restaurant supplying only through section 9(5) services can use the threshold exemption
The same FAQ explains that suppliers generally lose threshold exemption when they make supplies through an operator required to collect TCS under section 52. It makes an exception for suppliers of services for which the operator pays tax under a section 9(5) notification. Restaurant service covered by the notification can therefore qualify for the threshold exemption, subject to the restaurant’s complete facts and the law applicable to its other activities.
Registration may still be required for other activities
App sales are included in aggregate turnover even though the ECO pays the restaurant-service GST. Add those sales to direct dine-in, takeaway, catering and other supplies when testing the applicable threshold. A restaurant that also makes supplies not covered by section 9(5), crosses the relevant threshold, or falls under another compulsory-registration rule must evaluate those facts separately. Obtaining registration voluntarily does not transfer the section 9(5) restaurant-service payment obligation from the ECO to the restaurant.
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Who issues the GST invoice?
For the restaurant-service portion supplied through the app, the ECO issues the invoice. CBIC Circular 167/23/2021-GST states: “The invoice in respect of restaurant service supplied through ECO under section 9(5) will be issued by ECO.” The restaurant should not issue a second GST invoice to the customer for the same section 9(5) restaurant service.
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Information an invoice must contain
CBIC invoice rules require the applicable supplier identity and GSTIN, a unique serial number, issue date, recipient details where required, a description or accounting code for the service, taxable value and tax details. For taxable services, the invoice is generally issued within 30 days of the supply. The ECO’s invoice should therefore identify the operator as the supplier for the section 9(5) portion and show the tax charged under the applicable rate entry.
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GST on restaurant service versus TCS
GST under section 9(5) and tax collected at source under section 52 are different mechanisms. The circular says that ECOs no longer collect TCS or file GSTR-8 for restaurant services on which they pay GST under section 9(5. TCS continues for other goods or services supplied through the operator that are not covered by a section 9(5) notification.
For context, CBIC’s sectoral FAQ describes the general TCS rate as 1%—0.5% CGST plus 0.5% SGST—for supplies within the section 52 framework. That general rule excludes supplies for which the operator pays the entire tax under section 9(5). A settlement statement that shows no TCS on a restaurant order is therefore not, by itself, an error; it may reflect the statutory exclusion.
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Restaurant’s GSTR-1
CBIC’s GSTR-1 instructions state that supplies under section 9(5), for which the operator is liable, are not reported by the supplier in the ordinary taxable-supply tables 4A or 4B and are not treated as exempt supplies. The operator has a dedicated section 9(5) reporting section. Do not move these sales into an exempt-supply column simply because the restaurant does not pay output tax on them.
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Restaurant’s GSTR-3B
The 2021 circular described interim reporting for registered restaurants in Table 8 of GSTR-1 and Table 3.1(c) of GSTR-3B. Return forms and portal instructions can change. Before filing, use the current GST portal instructions for the relevant period and reconcile the treatment with the operator’s monthly statement. An old circular-era table reference should not override a current form or instruction.
Operator’s reporting
The ECO reports the section 9(5) liability in the operator’s designated return fields. It does not file GSTR-8 TCS for the restaurant-service portion on which it pays GST under section 9(5), although GSTR-8 treatment can continue for other section 52 supplies.
| Return issue | Restaurant supplier | ECO |
|---|---|---|
| Output GST on notified restaurant service | Not paid by the restaurant under section 9(5) | Paid by the ECO |
| Ordinary GSTR-1 tables 4A/4B | Section 9(5) supplies are excluded from these tables | Use the operator’s section 9(5) reporting section |
| GSTR-3B table treatment | Follow the current portal instruction; the 2021 circular’s interim reference was Table 3.1(c) | Report the operator-paid liability in the applicable current fields |
| GSTR-8 | Not filed by the restaurant for this reason | No TCS filing for the restaurant-service portion paid under section 9(5) |
A monthly workflow that prevents mismatches
- Separate order types. Export the app’s order-level report and mark restaurant service, cancellations, refunds, mixed orders and any non-restaurant line items.
- Match the operator invoice. Confirm that the ECO-issued customer invoice describes the restaurant-service portion and uses the rate applicable to the premises and tax period.
- Record gross order value. Build aggregate turnover from the value of supplies, not merely the net amount credited after commission, discounts, refunds or other settlement deductions. Apply the correct treatment to genuine cancellations and credit or debit notes.
- Split mixed orders. Trace each non-restaurant supply to the supplier that issued its invoice. Keep those values out of the section 9(5) restaurant-service bucket.
- Reconcile the settlement. Compare the operator’s settlement statement with bank credits, commissions, other platform charges, refunds, cancellations and invoice totals.
- Prepare the return working papers. Document the section 9(5) value, the treatment selected under the current GSTR-1 and GSTR-3B instructions, and any separate taxable supplies.
- Review exceptions. Investigate missing invoices, duplicate orders, unexplained TCS, negative settlements, chargebacks and differences between the app report and the bank statement before filing.
A spreadsheet, accounting package or POS integration may be used, but no particular software is mandated by the cited rules. The control that matters is an auditable link from each order to its invoice, settlement, bank entry and return working paper.
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Worked examples
Single restaurant-service order
Assume an order has a taxable restaurant-service value of ₹1,000, the premises qualifies for the ordinary non-specified-premises entry, and no discount or refund changes the value. The listed GST is 5%, calculated as ₹25 CGST and ₹25 SGST. The ECO issues the customer invoice and pays that ₹50 output tax. The restaurant records the ₹1,000 supply in aggregate turnover, does not issue a second customer GST invoice for the same restaurant service, and observes the no-ITC condition attached to the 5% entry.
Mixed order
Suppose an app checkout contains a restaurant meal and a separate packaged product supplied by another seller. The ECO handles the notified restaurant-service portion under section 9(5). The supplier of the packaged product remains responsible for that product’s invoice and GST treatment, and section 52 TCS can apply where its conditions are met. A single net settlement credit should not be posted as though every line were restaurant service.
Common mistakes and corrections
- Charging GST twice: Do not add a second restaurant-service GST invoice when the ECO has issued the section 9(5) invoice.
- Calling app sales exempt: Section 9(5) supplies are not ordinary exempt supplies in the restaurant’s GSTR-1 tables; use the current reporting instruction.
- Using net settlement as turnover: Commissions and platform deductions explain the bank credit but do not automatically erase the underlying supply value.
- Applying TCS to the restaurant portion: TCS is excluded where the ECO pays GST under section 9(5); check whether a charge relates to another supply instead.
- Ignoring unregistered sales: Lack of restaurant registration does not remove app-order values from aggregate turnover.
- Using 5% without checking premises: Confirm that the location is not a specified premise and verify the current rate schedule.
- Claiming ITC against the 5% entry: The listed non-specified-premises entry is conditional on not taking ITC for goods and services used for that service.
- Combining mixed supplies: Preserve separate invoice and tax trails for restaurant service and other goods or services.
- Following obsolete portal screens: Recheck current GST portal instructions each filing period rather than relying only on the interim 2021 table references.
- Leaving refunds unreconciled: Retain credit notes, debit notes, cancellation records and the operator’s adjustments so the return working paper agrees with the final order value.
Records to retain
For each filing period, keep the app order-level sales file, cancellation and refund data, ECO-issued invoices, settlement statements, commission and other platform-charge records, bank credits, credit and debit notes, mixed-order breakdowns and the GST return working papers. These records let the restaurant demonstrate why the ECO paid section 9(5) tax, why a separate item was treated differently, and how reported values were reconciled.
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