Facts:
I operate two business verticals — a trading business and a restaurant business — under a single GSTIN. The trading business is under the regular scheme with full ITC eligibility, and ITC on its inward supplies has been validly and correctly availed as per Section 16 of the CGST Act, 2017.
The restaurant business charges GST @ 5% under Entry 7(i) of Notification No. 11/2017-Central Tax (Rate), and I have strictly not availed any ITC on inward supplies used in supplying the restaurant service — in full compliance with the condition attached to that entry ("provided that credit of input tax charged on goods and services used in supplying the service has not been taken").
There is no overlap or shared input/input service between the two verticals — they are entirely independent supply chains.
Question:
Whether I can legally utilize the Input Tax Credit balance validly availed and lying in the Electronic Credit Ledger on account of the trading business, to discharge the 5% output tax liability of the restaurant business, given that:
(a) No ITC has been availed on any input/input service attributable to the restaurant vertical (Condition 7(i) fully complied with), and
(b) Section 49(4) of the CGST Act permits utilization of the Electronic Credit Ledger balance for payment of "any output tax" without vertical-wise restriction, and
(c) There is no requirement under Section 16(1) for a one-to-one nexus between a specific input and a specific output supply.
Would this be treated differently from the fact pattern in Circular No. 164/20/2021-GST (which dealt with hotel-restaurant ITC, where inputs may have been shared/common), given that in my case the two verticals have zero common inputs?
Request views/case laws/rulings supporting or opposing this position, and whether an Advance Ruling application is advisable for certainty.
CAclubindia
