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Restaurants ITC

prashant Kumar Singh (student) (246 Points)

09 November 2018

can a restaurant avail ITC

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8 Replies

gupta gopavarapu (109 Points)
Replied 09 November 2018

As per section - 17(5)
food and beverages are blocked credits and not available to take credit.
EXCEPT where an inward supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply;
So ur eligible to claim ITC.

prasad Nilugal ( GST Practitioner & Accounts ) (14163 Points)
Replied 09 November 2018

No ITC for only restaurant , 5% GST

gupta gopavarapu (109 Points)
Replied 09 November 2018

No ITC can be claimed ONLY if registered as composition dealer.
If it is registered as normal tax payer, above explanation will comes into scenario.

prasad Nilugal ( GST Practitioner & Accounts ) (14163 Points)
Replied 09 November 2018

Please confirm Mr Prashant Kumar singh are you a composition dealer ?.

Pankaj Rawat (GST Practitioner) (55032 Points)
Replied 09 November 2018

As per CGST(rate) Notification no. 46/2017 , Rate for Restaurant is 5% without ITC
Hence Restaurant cannot claim ITC

Note : Restaurants in hotel where room tariff is 7500/- or more , charge 18% with full ITC

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prashant Kumar Singh (student) (246 Points)
Replied 09 November 2018

No Sir, I am registered as regular dealer

Shivam RC (Student) (23683 Points)
Replied 09 November 2018

Absolutely Agree with Pankaj Sir.....

In both cases, i.e. Composition Scheme ( u/s 10 of CGST Act 2017 ) and Regular Scheme ( u/s 22 of CGST Act 2017 ) they have to charge 5% GST without the benefit of INPUT TAX CREDIT ( ITC ).

Hence, Restaurants cannot claim INPUT TAX CREDIT in both the Cases.

EXCEPTION :

As correctly said by Pankaj Sir, " if the Restaurant is in a Hotel where the Declared Tariff is ₹ 7,500 or more, then the Restaurant have to charge 18% GST with full benefit of ITC."

Regards.

The only difference between Composition Scheme Dealers and Regular Taxpayers is that, the former will be paying 5% GST ( without ITC ) on their Quarterly Turnover ( from their own pocket ) and cannot charge it from the Customers and the latter i.e. Regular Taxpayer will be charging 5% GST ( without ITC benefit ) from their Customers.

3 Like