How to price a menu: from plate cost to the number guests see.

Step 1: know what each plate costs

Pricing starts with the plate cost: what the ingredients in one serving cost you at today’s purchase prices, including oil, masala and garnish. Weigh the portion the way the kitchen actually serves it, not the way you wish it did. Our food cost calculator works this out from a recipe. Start with your 20 best sellers, then work down the menu.

Step 2: the food cost % method

Decide what share of the price the ingredients should take, then divide:

Menu price before GST = plate cost ÷ target food cost %

Indian restaurant trade writing commonly puts the target between 25% and 35%, with quick-service places and cafés lower and fine dining higher. There is no official benchmark. Example dishes at a 30% target, rounded up to ₹10:

The plate costs are examples, not market data. The menu price calculator does this for any dish, with or without GST.

Step 3: check the rupees each plate leaves

Food cost % is not the whole story. Contribution margin is the price before GST minus the plate cost: the rupees each plate leaves to pay rent, salaries and profit.

The mutton dish has the “worst” food cost but leaves the most money per plate. Forcing it down to 30% would push the price to ₹600 and may stop it selling. Look at both numbers together, along with how many plates each dish sells. Trade writing sorts dishes into four groups: stars (popular and high margin: keep and show them well), plowhorses (popular, low margin: adjust the portion or price slowly), puzzles (high margin, few sales: describe or place them better) and dogs (neither: replace them).

Step 4: check the market

A formula gives the lowest price you should accept, not the price guests will pay. Look at three or four places near you with similar seating and service, and at what a family usually spends for two. If your formula price is far above theirs, fix the recipe or portion before you raise the price. If it is far below, you may have room.

Step 5: GST included, or “GST extra”?

We found no rule that menu prices must include GST, and both styles are common in India. The “inclusive of all taxes” price rule in the Legal Metrology (Packaged Commodities) Rules is for pre-packed goods, not dishes cooked to order, and the Central Consumer Protection Authority’s 2022 service charge guidelines describe placing an order as consent to pay the menu prices “along with applicable taxes”. What matters is that the guest is not surprised, and that the bill shows the tax correctly.

• The bill must show the tax. A GST tax invoice has to show the taxable value, the rate and the amount of central and state tax, so a GST-inclusive price is split on the bill.
• Composition scheme: you cannot add GST to the bill. You pay 5% of turnover yourself, so build it into the menu price (₹300 ÷ 0.95 ≈ ₹316). Read GST on restaurant food.
• No hidden extras. A service charge cannot be added by default (see the service charge rules), and the new UPI fee cannot be passed to the guest (see UPI charges). If costs rise, change the menu price.
• Bottled water and cold drinks: in December 2017 the Supreme Court held that the Legal Metrology Act does not stop hotels and restaurants from selling packaged water above MRP, because dining is a composite supply of food and service.

Step 6: round without guesswork

• Round up, not down. Rounding down puts every plate below your target. ₹232 becomes ₹240, not ₹230.
• Pick one style and keep it. Some places use ₹199-style prices, others prefer ₹200. We found no reliable Indian data showing that one sells more, so choose what fits your place and use it across the menu.
• If GST is included, round the final price (₹315 might become ₹320) so guests do not deal with coins.
• Price half plates above half. A half plate takes nearly the same work, packing and service as a full one, so cost it on its own rather than halving the full price.

Step 7: prices on delivery apps

On Swiggy and Zomato the app keeps a commission plus other charges, and the app (not you) collects and pays the 5% GST on the order. Many restaurants list higher prices on the apps to cover this. A simple way to set them:

App price = what you want to keep ÷ (1 − total app deductions as a share of the price)

Example (your rates will differ): if commission and charges together take 30% of the listed price and you want to keep ₹300, list the dish at ₹300 ÷ 0.70 = ₹428.57, so ₹430. Use the commission calculator with your own contract rates, and read our guide to Swiggy and Zomato commission. Before you set different prices, read your app contract: the Competition Commission of India has been investigating price parity clauses (rules against offering lower prices elsewhere) since 2022. The case was still being heard in July 2026, and we found no final order by 10 October 2026.

Keep prices right after you set them

A dish priced at 30% food cost can drift to 40% when paneer or oil prices rise. Recheck your top 20 dishes whenever a big ingredient moves, and the whole menu every three to six months. Our food cost guide shows how to compare recipe cost with what you actually used.

Pricing with Venditas

In Venditas you add a recipe to each dish once. Purchases keep ingredient costs current, and each dish shows its food cost, so you can see when a price needs to change. Tick “Menu prices already include GST” and every bill shows the GST inside the price; composition scheme bills are supported too. It needs internet, and it is included in the ₹3 per bill price after 30 days free.

This guide is general information as of 10 October 2026, not tax or legal advice. The dishes and figures are examples, not data from real restaurants.

Sources

• Restaurant India: how to calculate food cost (March 2025), food cost ranges by restaurant type. Checked 10 October 2026.
• Restaurant India: how to design a profitable restaurant menu (June 2026), the 25% to 35% range, contribution margin and the four dish groups. Checked 10 October 2026.
• CBIC: Rule 46 of the CGST Rules (tax invoice), taxable value, rate and amount of tax on the invoice. Checked 10 October 2026.
• LiveLaw: hotels and restaurants can sell packaged water above MRP (Supreme Court, December 2017), including why the Legal Metrology rules do not cover a restaurant meal. Checked 10 October 2026.
• CCPA guidelines on service charge in hotels and restaurants (4 July 2022), on menu prices “along with applicable taxes”. Checked 10 October 2026.
• Outlook Business: CCI investigation findings on price parity (November 2024), Lapaas Voice: NRAI seeks interim relief, hearing on 22 July 2026 (July 2026) and Business Standard: the Zomato price parity case explained (15 July 2026). Checked 10 October 2026.