Input tax credit of hotel

To claim Input Tax Credit (ITC) for hotel expenses in your GSTR-3B return, you must report the eligible ITC in Table 4 of the form.

Reporting in GSTR-3B

• Table 4(A)(5): This is where you report "All other ITC." The system typically auto-populates this figure from your GSTR-2B, which is generated based on the invoices uploaded by your vendors (the hotels).

• Reconciliation: Always ensure that the ITC you intend to claim matches the data appearing in your GSTR-2B. If there is a discrepancy (e.g., the hotel failed to file their GSTR-1, or the invoice details were incorrect), the credit will not be available or will show as ineligible.

• Correction: If you find that the ITC is not appearing or is incorrectly categorized in your GSTR-2B, you must contact the hotel to ensure they have correctly filed their GST return and issued a B2B invoice with your company’s GSTIN.

Crucial Conditions for Eligibility

ITC is not automatic. To successfully claim credit for hotel stays, the following conditions must be met:

1. Business Purpose: The stay must be for a valid business purpose.

2. Company Invoice: The tax invoice must be issued in the name of your company, including your company's GSTIN. Invoices issued only in the employee's name are generally not eligible for ITC.

3. GST Rate Slab:

   • Above ₹7,500: For hotel rooms with a tariff exceeding ₹7,500 per night, GST is charged at 18%, and ITC is allowed.

   • Up to ₹7,500: For rooms priced at ₹7,500 or below, GST is charged at 5%, but no ITC is allowed.

4. Tax Paid: The hotel must have actually paid the tax to the government (which is reflected in your GSTR-2B).

5. Place of Supply: If your company is registered in a different state than the hotel, the invoice will attract IGST. If in the same state, it will be CGST + SGST. Ensure your accounting team categorizes this correctly in your books to match the GSTR-3B entries.

Summary: Report your eligible hotel ITC in Table 4(A)(5) of GSTR-3B. Ensure the invoice is in your company's name with your GSTIN, the room tariff is above ₹7,500, and the credit is reflected in your GSTR-2B.