Event management and tourism services: composite supply treatment permits ITC on bundled food and beverage where invoice and tax rate comply.

Event management and tourism services provided as a bundled offering qualify as a composite supply where event management is the principal supply and food and beverage are ancillary; consequently, food and beverage lose independent identity and are taxed according to the principal supply, making the provider eligible to claim input tax credit on such inward supplies. The proviso concerning eligibility for input tax credit is satisfied because the applicant makes an outward taxable supply of the same category as a composite supply, so ITC is admissible. A single itemized tax invoice from the supplier suffices for claiming ITC, provided the invoice meets tax invoice requirements and the supplier has charged the applicable tax rate.

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Issues: (i) Whether the applicant is eligible to avail Input Tax Credit (ITC) on food and beverage services under Section 17(5) when such supplies are part of event management and tourism services; (ii) Whether separate invoices from hotel vendors are required for claiming ITC on food and beverage services; (iii) Whether the applicant is eligible to claim ITC where the hotel invoices food and beverage to the applicant and the applicant recharges the client with a margin issuing its own invoice; (iv) Whether ITC is available on the entire value where conference hall and food charges are inseparable and invoiced as a single "conference package"; (v) Whether ITC is available on a consolidated hotel package (room, conference hall, food) invoiced without bifurcation.

Issue (i): Eligibility to avail ITC on food and beverage services under Section 17(5) in event management and tourism services.

Analysis: Event management services, as described, comprise naturally bundled supplies where event management is the principal supply and other components (room, hall, food) are ancillary. Section 2(30) defines composite supply; the proviso to Section 17(5)(b)(i) permits ITC where the inward supply of food and beverages is used as an element of a taxable composite or mixed supply or for making an outward taxable supply of the same category. Application of these provisions depends on the characterisation of the outward supply as a taxable composite supply and compliance with conditions in Section 16(2).

Conclusion: ITC on food and beverage services is allowed where such supplies are used as an element of the applicant's taxable composite supply of event management (answer in the affirmative) in accordance with the proviso to Section 17(5)(b)(i).

Issue (ii): Requirement of separate invoices from hotel vendors for claiming ITC on food and beverage services.

Analysis: Section 16(2) requires possession of a valid tax invoice and other statutory conditions for claiming ITC but contains no mandate that components of a composite supply must be separately invoiced. Where the supplier issues a single invoice for a composite inward supply and tax is charged consistent with the principal supply, the recipient can meet the documentary requirements under Section 16(2).

Conclusion: Separate invoices for individual components are not mandatory; a single consolidated invoice complying with Section 16(2) suffices (answer: No separate invoice required).

Issue (iii): Eligibility to claim ITC when the hotel invoices food to the applicant and the applicant recharges the client with a margin issuing its own invoice.

Analysis: Where the applicant procures food from the hotel and re-supplies it to the client (either as a distinct taxable supply or as part of a composite event management supply), the inward supply is used in furtherance of business and qualifies under Section 16(2) and the proviso to Section 17(5)(b)(i). If the applicant treats the food as an element of the composite outward supply, the applicant's invoice to the client must reflect the tax rate applicable to the principal supply.

Conclusion: The applicant is eligible to claim ITC in such cases (answer in the affirmative), subject to compliance with Section 16(2) and correct taxation of the outward composite supply.

Issue (iv): Eligibility to avail ITC on the entire value where conference hall and food charges are inseparable and invoiced as a single "conference package".

Analysis: A bundled inward supply invoiced as a single composite package, where the package is an inward composite supply used in providing an outward taxable composite supply, will have its components lose individual identity. If the supplier charges tax consistent with the principal supply and statutory ITC conditions are met, the recipient's ITC claim on the entire invoiced value is governed by the proviso to Section 17(5)(b)(i).

Conclusion: ITC is admissible on the entire value of such a consolidated conference package when statutory conditions and applicable tax rate are satisfied (answer in the affirmative).

Issue (v): Eligibility to avail ITC on a consolidated hotel package (room accommodation, conference hall, food) invoiced without bifurcation.

Analysis: The availability of ITC on a consolidated package depends on supplier's tax treatment and applicable rate. If the hotel charges 18% (i.e., is functioning as a specified premises where ITC is available upstream) and the inward supply is used in making the applicant's taxable composite outward supply, the proviso to Section 17(5)(b)(i) permits ITC on the total invoice. Conversely, where the supplier applies a concessional rate (e.g., 5% without ITC applicable upstream), the flow of credit is blocked irrespective of the recipient's use.

Conclusion: ITC is admissible on the total consolidated invoice amount provided the hotel has charged the appropriate rate (18%) and other statutory conditions are met; if the hotel has applied a rate/notification that disallows upstream ITC (e.g., concessional 5%), the credit is blocked.

Final Conclusion: Subject to compliance with Section 16(2) documentation and the supplier's applicable tax treatment, the proviso to Section 17(5)(b)(i) permits the applicant to claim ITC on inward supplies of food and beverages when such supplies are elements of the applicant's taxable composite supply of event management; consolidated invoices are acceptable; re-invoicing with margin does not defeat ITC provided outward taxation aligns with the principal supply.

Ratio Decidendi: Where inward food and beverage supplies form part of a taxable composite supply and the recipient satisfies the documentary and statutory conditions of Section 16(2), the proviso to Section 17(5)(b)(i) authorises availing input tax credit on such supplies, subject to the supplier having charged the tax rate that permits upstream credit transfer.

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