Yes, McDonald's in India charges Goods and Services Tax (GST) on its food and services. While many standalone restaurants have a 5% GST rate, McDonald’s in India has faced scrutiny over its tax rates and has previously been associated with 18% GST scenarios for certain services. The specific rate can vary based on the, in-house vs. delivery, or if the restaurant is in a "specified premises" like a hotel.
GST on Restaurant Food & Services, Beverage Services, and Accommodation. Under GST, Restaurants fall under the 5% GST rate, with no option to claim input tax credit (ITC) or the 18% GST rate, with ITC claims.
GST Slabs for Food & Restaurant (2025)
The majority of food items fall under the 5% GST slab. However, under the GST 2.0 reform, restaurants within hotels are now classified as 'specified premises' and are subject to 18% GST. Standalone restaurants, on the other hand, can choose between charging 5% GST or 18% GST.
18% GST on food services including delivery of food provided by a restaurant/food joint located within premises of a club, guest house, etc.
In India, the 30% income tax rate generally applies to individuals earning above ₹24 Lakhs (under the old regime/default for some) or ₹15 Lakhs (under the new optional regime for FY 2025-26) and to firms (as a flat rate), while certain income types like lottery winnings, online gaming, and virtual digital assets (like crypto) are taxed at a flat 30% for everyone, regardless of total income.
Generally, basic food items like fresh fruit, vegetables, meat, bread, and milk are GST-free. However, foods that are prepared, cooked, or consumed on the premises, such as meals at restaurants or takeaway hot food, are typically taxable.
Maximum marginal rate is the highest rate of tax at any income level. This means for those with incomes between Rs 2 crore and Rs 5 crore, 39% will be the highest applicable tax rate, and for those with incomes above Rs 5 crore, it will be 42.74% — the highest tax rate since 1992.
Key Categories of Goods under 40% GST Slab
Tobacco and related intoxicants as sin goods (e.g., cigarettes, bidis, pan masala, caffeinated drinks) Drinks with high sugar content and caffeinated. Super-luxury and luxury 4-wheelers, 2-wheelers and personal use yacht, aircraft, etc. Casino games and betting activities.
For any standard-rated supplies of goods or services that you make on or after 1 Jan 2024, you must charge GST at 9%. For instance, if you issue an invoice and receive payments for your supply on or after 1 Jan 2024, you must account for GST at 9%.
Many states don't tax basic groceries, with some (Alaska, Delaware, Montana, New Hampshire, Oregon) having no state sales tax at all, while others exempt food from their general sales tax, like Arizona, California, Colorado, Connecticut, Florida, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Texas, Vermont, Washington, West Virginia, Wisconsin, and Wyoming, according to Stripe,, though local taxes or taxes on prepared/soda/candy often apply. The key is the distinction between groceries for home consumption (often exempt) and prepared foods or snacks (usually taxed).
What is the GST rate for rice? Under GST, rice is categorised under the Harmonised System of Nomenclature (HSN) code 1006. This code encompasses all types of rice, including basmati, non-basmati, paddy, broken rice, and parboiled rice. A GST rate of 5% applies to each of these rice varieties.
Get McAloo Tikki Burger, Fries(R) and Coke only for Rs. 99!
McDonald's business operations incur a substantial amount and variety of taxes, including corporate income tax on its profits across the globe, as well as social, real estate and other taxes.
India is a price-sensitive market and McDonald's understood this from the outset. To appeal to the mass audience, the brand adopted a value-driven pricing strategy. When it entered in 1996, its burgers started from Rs 20 (equivalent to Rs 115.88 today), making them accessible to a wide audience.
By zero rating it is meant that the entire value chain of the supply is exempt from tax. This means that in case of zero rating, not only is the output exempt from payment of tax, there is no bar on taking/availing credit of taxes paid on the input side for making/providing the output supply.
The 40% GST is now a single consolidated rate for sugar-added, flavoured, or carbonated drinks, including cola, lemonade, and fruit-based fizzy beverages. The previous 12% compensation cess has been removed. All aerated soft drinks, whether fruit-based or cola-based, now attract 40% GST under the sin goods category.
Examples of income that are not taxable in India include agricultural income, gifts and inheritances, interest on EPF and PPF, scholarships and awards, life insurance proceeds, leave encashment, gratuity, Long-Term Capital Gains (LTCG), and interest on tax-free bonds.
Among their findings, based upon IRS data for 2022: The top 1% of taxpayers, those with income above $663,164, paid 40% of the total income tax.
According to government reports, while over 7 crore people file tax returns, only a fraction of them actually pay taxes because many fall below the taxable income threshold or use deductions to reduce liability.
GST-Free Items:
Eggs and milk. Bread without filling or toppings. Rice, pasta, and plain cereals.
Local taxes
Some state and local governments may also require us to collect tax (ex. Sales Tax) if Spotify undergoes marketing/promotional activities in the state or locality, or uses local sales agents or consultants.