SEZ Hotel Stays: Input Tax Credit Eligibility

This query is : Resolved

Quick Summary

This discussion explores whether SEZ units located in Noida, Uttar Pradesh, can claim input tax credit (ITC) on hotel stays within the same state, particularly when the hotel bill shows IGST. While supplies to SEZs are zero-rated, allowing hotels to claim refunds, the eligibility for SEZ units to claim ITC on these services remains a debated topic. The consensus suggests it's unlikely, even if the hotel doesn't claim a refund, as SEZ exports are typically GST-exempt.

Shailendra Bansal

Shailendra Bansal (Querist)
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14 January 2021 Dear All, We are a SEZ Unit located in NSEZ, Noida (UP) and if we availed hotel services in same state (UP) will we eligible for input tax credit noting that the bill raised by hotel to us will have IGST (not CGST and SGST)

Please avise

Thanks.............Shailendra Bansal

Lekhraj sood

Lekhraj sood (Expert)
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14 January 2021 Supplies to SEZ are zero rated. So hotel can claim refund of IGST paid.

Shailendra Bansal

Shailendra Bansal (Querist)
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14 January 2021 My question is hotel stay inter state is ineligible for input credit and same state is eligible for input credit. Assuming hotel does not claim refund of IGST paid can we claim if hotel stay is in same state in case of SEZ companies ?

Lekhraj sood

Lekhraj sood (Expert)
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14 January 2021 In my opinion No though matter is controversial.Where will you use this ITC

Shailendra Bansal

Shailendra Bansal (Querist)
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14 January 2021 Since most hotels will not agree for claiming of IGST we can pay IGST and then use this input IGST against exports on payment of IGST and then get refund from the government of IGST paid for exports.

Lekhraj sood

Lekhraj sood (Expert)
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14 January 2021 SEZ can not export with payment of GST.SEZ itself is custom warehouse so export from custom warehouse are not chargeable to GST.

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