On Hotel Bills shall we consider Input or Not?

[Asked by Guest]

Dear All,

Greetings of the day. We are a service provider (Health care slimming and Beauty) and our Managing Directors- will visits various places due to improve the business for business promotions purpose. I want to know can we avail Service tax input paid to hotels at the time of business tours?

Kindly clarify me.

Thanks is advance.

Regards

Laxman J

[DR.MARIAPPAN GOVINDARAJAN]

If it is related to the provision of output service, then credit can taken on such input service tax.

Thank you sir,

I did not understand (If it is related to the provision of output service) please explain clearly.

Regards

Laxman J

[KASTURI SETHI]

Dear Querist,. Health care, slimming, beauty parlour are your output service. In case you can prove that Hotel bills are in relation to your output service, credit on the hotel bills mentioning complete particulars , can be taken.Bill should be addressed in the name of your firm. It should not be personal. I support the views of Sh. Mariappan, Sir.

[Ganeshan Kalyani]

Yes, credit is eligible subject to the condition that the input service has nexus with the output service. Such type of service i.e. hotel stay etc are challenging to prove that it has a business connection because the same may not have any concern with the business activity.

[Himansu Sekhar]

If the bills are in the name of the director, credit may not be available,But the bill should be in thename of the business enterprises to get ther credit . Also it is better to prepare a detailed programme of the tour indicating the business purpose of the travel and stay.

AI Summary

Input service tax credit allowed only when hotel bills show nexus with output services and are billed to the firm.
Input service tax credit on hotel accommodation is allowable only if a clear nexus between the hotel stay and the taxpayer's output services is established. Bills must be addressed to the business enterprise with complete particulars and be supported by documentary evidence of the business purpose (for example, a detailed tour programme). Bills in a director's personal name generally will not substantiate entitlement to credit.