“GST Alert: Major changes for Restaurants Effective 1st April 2025”

Important GST Update for Restaurants (Effective from 1st April 2025)

31st March 2025 is the last date to file declaration   

 The concept of Declared Tariff has been scrapped.

Now, specified premises will be determined based on the actual tariff charged in the preceding financial year (i.e., value of accommodation supply ≥ ₹7,500/day), and not on declared tariff.

As per Notification No. 05/2025–CTR, a new option has been introduced for restaurants located in hotels with a tariff of ₹7,500 or less per day:

They can continue paying GST @ 5% without ITC,

OR

Opt to pay GST @ 18% with ITC by filing a declaration.

Declaration Forms: Annexure VII – For existing registrations

Annexure VIII – For new registrations

Annexure IX – For opting out

Since forms are not yet live on the portal, the declaration can be submitted manually or via registered email to the jurisdictional officer.

One-time declaration is valid for the current and subsequent financial years – no need for yearly declarations.

In my opinion, this new option (18% with ITC) will benefit restaurants with:

– High investment in interiors

–Significant recurring GST expenses (e.g., rent)

 Requesting @ArpitHaldia Sir to share insights on scenarios where this option proves to be beneficial & the rationale behind this amendment.

Notification Link:https://taxinformation.cbic.gov.in/view-pdf/1010273/ENG/Notifications