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Input tax credit

prashant Kumar Singh (student) (246 Points)

14 May 2019

can a restaurant avail input tax credit on purchase

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Saurav Bhattacharya (258 Points)
Replied 14 May 2019

only furtherance of business ITC can be claim

abhishek bardia (partner) (308 Points)
Replied 14 May 2019

no restaurant charging 5% tax cannot avail the benefit of input tax credit on purchase.

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prashant Kumar Singh (student) (246 Points)
Replied 14 May 2019

Abhishek sir , then restaurant charging 18% tax can avail ITC

Saurav Bhattacharya (258 Points)
Replied 14 May 2019

yes 18% can avail

abhishek bardia (partner) (308 Points)
Replied 14 May 2019

no sir, 18% can only be adopted by restaurants within hotels having room tariff above 7500

Saurav Bhattacharya (258 Points)
Replied 14 May 2019

hotel business opt composition delear can not claim ITC but expect composition delear

Nandini H Gupta (Chartered Accountant ) (369 Points)
Replied 14 May 2019

At present rate notification 11/2018 provides at entry 7(i), rate of 5% with no ITC condition for restaurant (less than 7500 tariff).

Further Entry (ix) provided for option of 18% with explanation to entry (ix) provides that"For the removal of doubt, for entry no (i)- shall attract central tax @ 2.5% without any input tax credit under item (i) above and shall not be levied at the rate as specified under this entry.

So, restaurant (other than in a premise whr tariff is more then 7500/unit/day) the rate of tax is only 5% and no ITC can be claimed.

There is no option to pay @ 18% with ITC been given.

Saurav Bhattacharya (258 Points)
Replied 14 May 2019

The November 2017 GST changes also included a big shift in the ITC. If your restaurant falls into the 5% GST slab, you can no longer claim the ITC on your monthly return. If you fall into the 18% slab, you can still claim ITC.