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RCM ITC allowed to hotel industry ?

Others 2268 views 2 replies
Respected sir,
My one of the client having hotel, there charges GST on there outward service @ 5%.. If any hotel industry tax has been paid @ 5%, the ITC on any goods or services are not allowed.

But as per notification number 09/2024 dated 10th oct 2024. RCM rent paid.

Can this RCM on rent paid are allowed as a ITC in GST to hotel industry?
Replies (2)
Quick Summary
Hotels charging GST at 5% generally cannot claim normal ITC on goods and services. However, ITC of GST paid under RCM on rent may be available subject to Notification 09/2024, proper RCM payment, eligibility conditions, and documentation compliance.

To clarify, your client, a hotel operator, charges GST at 5% on outward services.

 As per the GST laws, hotels are restricted from claiming Input Tax 0Credit (ITC) on goods and services, except for a few specific cases.

Notification 09/2024 The notification you mentioned, dated 10th October 2024, pertains to the Reverse Charge Mechanism (RCM) on rent paid.

 ITC Eligibility on RCM Rent Paid As per the notification, RCM rent paid by the hotel industry is eligible for ITC.

This means your client can claim ITC on the GST paid under RCM on rent. Conditions for ITC Claim To claim

ITC on RCM rent paid, ensure your client meets the following conditions:

1. _RCM applicability_: Verify that RCM is applicable on the rent paid.

2. _àGST payment_: Ensure GST has been paid under RCM on the rent.

3. _ITC eligibility_: Confirm that the ITC is eligible as per the notification and GST laws.

4. _Documentation_: Maintain proper documentation, including invoices, payment receipts, and RCM certificates.namaste Additional Considerations 1. _Consult GST experts_: Verify the interpretation of the notification with GST experts or consultants.

 2. _Review GST laws and regulations_: Stay updated on any changes to GST laws and regulations that may impact ITC claims. By meeting the conditions and following the guidelines, your client can claim ITC on RCM rent paid, as per Notification 09/2024.

RCM input is available, only thing is that restriction is on other ITC


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