ITC on Beverages for Canteen

ITC / Input 264 views 10 replies

Mehul Dugar

Business

32 Points Joined August 2016

Hi,
I have a query and want to discuss about it for general clarification as well.
"XYZ" is doing a business of running College Canteen (Restaurant) and pays GST @ 5% under regular scheme. As per provisions of GST, ITC on Beverages is not allowed. Now, as they sell the Beverages on MRP, should they consider it as inclusive of GST and pay 5% GST on it?
Also, wanted a clarification if GST ITC shall be allowed to them in any case(if any?) as the restaurants paying 5% output GST shall not avail any ITC?
Please share your wisdom. Whether paying 18% output tax would allow them to take credit for beverages in any way?
(P.s- College is not involved in any part)

Thanks in advance! Looking forward to hear some useful insights.

Replies (10)

Suresh Kumar

Account

408 Points Joined July 2022

1. They must consider GST (5%) as inclusive in MRP and pay 5% GST on it. NO ITC ALLOWED

2. If, it will go in GST rate 18% option then ITC on beverages is allowed to them as per section 17(5) proviso ITC in respect of goods restricted under said section shall be available where inward supply of such good is used for outward supply. All eligible ITC allowed in this option.

RAJA P M

"Do the Right Thing...!!!"

128116 Points Joined January 2015

Yes I agreed with the Suresh Kumar..

ITC can be allowed if supplies made with 18 percent tax ...

sabyasachi mukherjee

28009 Points Joined May 2017

Ok that's OK absolutely.

Mehul Dugar

Business

32 Points Joined August 2016

What if they show selling of packaged beverages as trading business other than regular restaurant business under same GST Registration and avail ITC as well as pay Output GST at applicable rates (28%)? Can this be considered?

RAJA P M

"Do the Right Thing...!!!"

128116 Points Joined January 2015

Originally posted by : Mehul Dugar
	What if they show selling of packaged beverages as trading business other than regular restaurant business under same GST Registration and avail ITC as well as pay Output GST at applicable rates (28%)? Can this be considered?

Yes it's considered...

No restriction for ITC if deal related business activities, like ;

Buy and Sell Beverages...

Suresh Kumar

Account

408 Points Joined July 2022

Originally posted by : Mehul Dugar
	What if they show selling of packaged beverages as trading business other than regular restaurant business under same GST Registration and avail ITC as well as pay Output GST at applicable rates (28%)? Can this be considered?

Yes, you can do it