Is AC Restaurant GST Different From Non-AC Now?
GSTZone Desk · Updated 2026
Short answer
No — and this has never been true under GST at any point, not just now. The AC-versus-non-AC distinction was a pre-GST era Service Tax/VAT rule. Under GST, the dividing line has always been whether the restaurant is standalone (5%) or located inside a ‘specified premises’ hotel (18%) — air conditioning has nothing to do with it.
In detail
This is one of the most persistent pieces of outdated tax folklore still floating around, largely because it genuinely was the rule before GST — restaurants with air conditioning attracted a different Service Tax treatment than non-AC ones, and that memory has stuck around long after the underlying rule was replaced.
Since GST launched in 2017, the actual criterion has always been about the TYPE of restaurant establishment, not its cooling system — a standalone restaurant charges 5% GST without ITC, whether it has central air conditioning or ceiling fans, and a restaurant inside a high-tariff ‘specified premises’ hotel charges 18% with ITC, regardless of its own AC status.
So if you see a restaurant bill explaining a rate difference by referencing AC seating specifically, that explanation itself is outdated — worth double-checking what’s actually driving the rate on that particular bill.
GSTZone tip
If a restaurant bill separates AC and non-AC seating with different GST rates, ask specifically what’s driving that difference — under current GST rules it should be the specified-premises classification, not the seating area’s cooling.
Related questions
So what actually decides a restaurant’s GST rate today?+
Whether it’s a standalone establishment (5%, no ITC) or located inside a hotel classified as ‘specified premises’ based on room tariffs (18%, with ITC) — covered in more detail elsewhere in this series.
Did outdoor catering ever follow the AC/non-AC rule under GST?+
No — outdoor catering has its own classification logic tied to the premises and hotel-tariff rules, following the same specified-premises framework as restaurant service generally.
Want the law itself?
Go deeper on GST Rates
This page answers one question. Our GST Knowledge Hub carries every section and rule behind it — the exact legal text, what it means in plain English, and how it has been amended. Free, no login.
Need this sorted for your specific case?
Every business’s facts are a little different. Talk to a GSTZone expert — we’ll tell you exactly where you stand, and handle the filing if you need it.
Or call +91 97554 06939 · WhatsApp us