As per section - 17(5) food and beverages are blocked credits and not available to take credit. EXCEPT where anÂ inward supplyÂ of goods or services or both of a particular category is used by a registered person for making an outwardÂ taxable supplyÂ 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.
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.
As correctly said by Pankaj Sir, " if the Restaurant is in a Hotel where the Declared Tariff is â‚ą 7,500 or more, then the Restaurant have to charge 18% GST with full benefit of ITC."
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.