GST on Tour Operators_ITC

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This query is : Resolved

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A tour operator currently paying 5% GST without Input Tax Credit (ITC) is asking if they can switch to the 18% GST rate with ITC to claim back the GST paid on new car purchases for business expansion. The advice given is that once a supplier opts for the 5% rate without ITC, they must continue with this option for the entire financial year. Changing the tax regime is only possible at the start of the next financial year.

USHA B G

USHA B G (Querist)
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17 August 2022 Dear all,

Hope your doing well,

My query is one of my client is a Tour Operator and presently is in the GST Rate of 5 % without ITC, now my client is purchasing a cars for expansion for business and paying GST for purchase of car almost 3lakhs ,

Can he opt for 18% with ITC now, what is the time limit and when can he opt if so what is the procedure to do so

Thanks in advace

Regards
USHA B G

Udaya Chandran

Udaya Chandran (Expert)
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18 August 2022 Once the supplier opts for payment of GST @ 5% without ITC, he has to continue under the same option throughout the financial year. He can change the scheme only in the next financial year.

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CA Puja Sharma

CA Puja Sharma (Expert)
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18 August 2022 The taxpayer can only change the tax regime in the next financial year.

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