Restaurant GST compliance: 5% no-ITC, Swiggy/Zomato section 9(5), composition scheme — the four issues that generate notices.

No. Standalone restaurants operating at the 5% GST rate are explicitly blocked from claiming input tax credit under the GST notifications for restaurant services. The 5% rate is a concessional rate in exchange for forgoing ITC — this is stated in the notifications that prescribed the rate. You cannot offset the 18% GST paid on equipment, utilities, packaging, or ingredients against your 5% output liability. If you attempt to claim ITC in your returns, the GST department will raise a demand with interest and penalty. The only way to get ITC is to switch to 18% GST, which is permitted only for restaurants in hotels with room tariff above ₹7,500.

No — for orders routed through Zomato or Swiggy, the GST liability is on the e-commerce operator (the aggregator), not on you as the restaurant. This is the effect of section 9(5) of the CGST Act: the government has notified that restaurant services supplied through e-commerce operators are taxed in the hands of the operator, not the restaurant. Zomato/Swiggy pay the GST and file returns on those orders. You receive the payout net of commission and GST. In your GSTR-1, these supplies are reported differently from direct dine-in or takeaway orders. Incorrect treatment — charging GST yourself on aggregator orders — creates double-taxation and GST mismatch notices.

Yes. Any person responsible for paying rent to any person (including an individual landlord) must deduct TDS under section 194I if the annual rent exceeds ₹2,40,000 (₹2.4 lakh). At ₹80,000 per month, your annual rent is ₹9.6 lakh — well above the threshold. The TDS rate on rent of land, building, or furniture is 10%. You must deduct TDS at 10% on each rental payment, deposit it with the government using Form 26QB or TDS Challan 281 (depending on structure), and file quarterly TDS returns. A default in TDS deduction attracts interest at 1% per month from the date of deductibility to the date of deduction.

Yes, if the aggregate turnover is below ₹3 crore (from FY 2023-24, provided less than 5% receipts are in cash — otherwise ₹2 crore). Under section 44AD, you declare 8% of turnover as net income (or 6% if receipts are digital/non-cash). You do not need to maintain books or get a tax audit if you opt for 44AD. However, if your actual profit is lower than 6%/8% and you want to declare it, you must maintain full books and get a tax audit. For a restaurant with thin margins, 44AD may declare more income than actual — the trade-off is zero book-keeping versus higher declared income.

Zomato and Swiggy deduct Tax Collected at Source (TCS) at 1% on net sales made through their platform under section 206C(1H) of the Income-tax Act. This TCS appears in your Form 26AS as a credit. When you file your annual ITR, you claim this TCS as a tax credit, which reduces your net tax payable or generates a refund. The TCS is not an additional tax — it is an advance tax collected by the aggregator on your behalf. You need to reconcile the TCS amount in your 26AS against the payouts received from the aggregator to ensure no credit is missed.