Certainly! Let’s address your query regarding claiming Input Tax Credit (ITC) on the accommodation bill for your office trip to Bangalore. The eligibility for ITC depends on certain factors, so let’s break it down:
Place of Supply:
Under the Goods and Services Tax (GST) regime, the place of supply plays a crucial role in determining whether you can claim ITC.
The place of supply for hotel accommodation services is defined under Section 12(3)(b) of the IGST Act, 2017. It states that the place of supply for services provided by hotels, inns, guest houses, home stays, clubs, campsites, houseboats, or any other vessels shall be the location where the immovable property or vessel is located or intended to be located.
In simpler terms, the place of supply for hotel accommodation services is where the hotel is physically situated.
Intra-State Supply:
If your office trip took place within the same state (either Tamil Nadu or Karnataka), and the hotel where you stayed is also located in the same state, you can claim ITC on the accommodation bill.
In this scenario, both CGST (Central Goods and Services Tax) and SGST (State Goods and Services Tax) apply, and you can avail ITC for these services related to your business activity.
Inter-State Supply:
If your office trip involved travel across state borders (for example, from Tamil Nadu to Karnataka), the situation becomes more complex.
When the service provider (hotel) supplies services to an interstate recipient (your company), the place of supply remains with the service provider. Consequently, the service provider charges both CGST and SGST.
Unfortunately, in this case, you cannot transfer CGST and SGST to another state. Therefore, ITC is not admissible to the service recipient (your company) located in other states.
Specific Scenarios for ITC Claim:
While you cannot claim ITC for routine accommodation services provided to employees (not required for business purposes), there are exceptions:
Urgent Meeting: If an employee stays in a hotel to attend an urgent business meeting, your company can claim ITC on the hotel expenses.
PG/Room Hired for Rent: If an employee rents a paying guest (PG) accommodation or a room for business purposes, ITC can be claimed.
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