Vat and GST on Bar & Resto

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A restaurant owner is seeking clarification on GST implications. They currently charge customers 5% GST and want to know if they can claim Input Tax Credit (ITC) at higher rates (18% and 12%) on raw materials. The general understanding seems to be that only 5% ITC can be availed, which could lead to an effective tax increase.

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(Querist)
18 December 2023 Hello All,

Our sister concern is a Restaurant and GST of 5% as per GST rates is charged to the customers , can ITC of 18% and 12% on the rawmaterials be claimed or only 5% is allowed to be availed

Please advice .
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Aashok Kumar Sharmapro badge online

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Aashok Kumar Sharmapro badge online (Expert)
14 January 2024 5% without ITC should be applicable here as per my understanding
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Smrity

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Smrity (Querist)
18 January 2024 Thank you Sir, even I think so. but then we might end up paying 18 % which would be an additional exps.
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