Eligibility of ITC on food and beverages

Save Share

This query is : Resolved

Quick Summary

This discussion explores the eligibility of claiming Input Tax Credit (ITC) on carry bags used for packing food items under GST. While the supplier charges 18% GST on the bags, the consensus leans towards non-eligibility for ITC, especially when the bags are integral to the food supply. There's also a suggestion that the carry bags might be considered part of a composite supply, potentially subject to the 5% GST rate applicable to the food itself.

Bhasker

Bhasker (Querist)
Follow

17 January 2021 One of my client is registered under gst and main business is food supply, for this he is under 5% slab, collecting gst from customers and remitting.

Is he eligible to claim ITC on carry bags, which he uses it for packing the food.

Note: The supplier charges 18% GST on carry bags.

Please clarify with link.

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
Follow

17 January 2021 SAME IS AVAILABLE AS IT IS FOR THE BUSINESS PURPOSE

Lekhraj sood

Lekhraj sood (Expert)
Follow

17 January 2021 good question. Since the carry bag is used to carry the food. In my opinion you no ITC will be available.And in my view you should charge 5% on carry bag also being composite supply.

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
Follow

17 January 2021 IN MY OPINION SAME IS AVAILABLE AS IT IS USED TO PROVIDE TAXABLE SUPPLIES..

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now