One hotel is charging 5% gst on its restaurant bills. Is it eligible for claiming ITC on inward supplies ?
If not eligible, how to treat it while accounting ?
i.e whether taking itc while passing purchase entry and reversing itc on month end (showing gst expense)
or ignoring the itc and taking amount inclusive of gst as expense while passing purchase entry ?
5% gst without itc for hotels with room tariff < 7500
18% gst with itc for hotels with room tariff > 7500
If you intend to report all inward supplies with GST (wherein your GST number is mentioned on bills) then,
As you mentioned, take itc while passing purchase entry and reversing itc on month end (reverse ITC and add back to same expense head).
Otherwise, as Mr Pritesh suggested, add tax to the cost.
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