Input tax credit in case of purchases made by hotels

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 November 2014 PURCHASES LIKE STATIONARY, ELECTRICITY APPLIANCES,FUEL, ETC
WILL THE ABOVE PURCHASES BE ALLOWED INPUT TAX CREDIT IN CASE OF HOTEL BUSINESS
PLEASE REPLY FAST.
I AM FACING THE SAME PROBLEM IN MY AUDIT AND NO ONE IS HERE TO GUIDE ME

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)

19 November 2014 yes if such are business exp then allowed to take credit.

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Querist : Anonymous

Querist : Anonymous (Querist)

19 November 2014 HOUSEKEEPING EXPENSE, BUILDING REPAIR & MAINTAINANCE, BOOKS&PERIODICALS "ITC" WILL BE ALLOWED OR NOT.IN CASE OF HOTEL

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)

19 November 2014 all the exp incurred for running business are allowed including the above.

MJ Krishnamurthy

MJ Krishnamurthy (Expert)

19 November 2014 All these are indirect expenses purchases,hence,tax paid on them are not allowed as ITC.VAT paid on purchases of goods required for manufacturing/making the sold products only are allowed for ITC.It is for this reason most of the small hotels opt for composition,In a hotel business most of the inputs,like cereals,pulses,vegetables,fruits,mutton,fish,milk,sugar, etc are exempted,and therefore,ITC will be very low and output will be high....mjk

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MJ Krishnamurthy

MJ Krishnamurthy (Expert)