For many small restaurant and café owners, GST registration feels like an added burden. But the real answer to whether it’s “okay” to skip GST depends on your turnover, your partnerships, and how you run your business.
When Restaurants Can Avoid GST Registration
Restaurants are not required to register under GST if:
- Their annual turnover is below ₹20 lakh (₹10 lakh in North-Eastern and hill states).
- They do not sell via online food delivery platforms like Zomato, Swiggy, Uber Eats.
- They run purely offline, serving walk-in customers only.
Example: A small tea shop or dhaba making ₹8–10 lakh annually from local customers doesn’t need GST.
When GST Registration Becomes Compulsory
Even if your turnover is below the threshold, you must register for GST if:
- You sell food through delivery aggregators (Zomato, Swiggy, etc.).
- You own a franchise outlet (like Domino’s, KFC, Subway).
- You operate as part of a hotel with room tariffs above ₹1,000.
In these cases, skipping GST isn’t allowed, and non-compliance can lead to penalties.
Penalties for Not Registering Under GST
Failing to register when required can be risky:
- 10% penalty of the tax due (minimum ₹10,000).
- Possible delisting from delivery apps.
- Legal notices and interest on unpaid GST.
Why Voluntary GST Registration May Still Help
Even if not compulsory, some small restaurants choose to register because it:
- Adds credibility — customers trust bills with GST.
- Enables growth — easier to partner with apps, expand into new markets.
- Future-proofs the business — once turnover crosses ₹20 lakh, you’re already compliant.
Conclusion
So, is it okay for restaurants to not register under GST? Yes, but only if you stay under the turnover limit and operate purely offline. If you’re planning to scale, partner with delivery apps, or expand into franchises, GST registration isn’t just mandatory — it’s a business enabler.
