gst rate and credit eligibility

[Ramakrishnan Seshadri]

Dear Sir,

We kindly request the experts to answer my query.

Our Directors went to hyderabad and stayed in hotel for business purpose. The hotel has charged 18% igst in their bill by mentioning our GSTIN. in tamilnadu.Whether credit is eligible or not and it is correct or not.

Another question is our directors stayed in telengana and do work in andhra pradesh. The telengana hotel has charged 9% cgst and 9% sgst in their invoice. whether it is correct .

Pleae confirm the experts our query

Thanks & Regards,

S.Ramakrishnan

[Rajagopalan Ranganathan]

Sir,

As per Section 12 (3) of IGST Act, 2017 " The place of supply of services by way of lodging accommodation by a hotel, inn, guest house, home stay, club or campsite, by whatever name called, and including a house boat or any other vessel shall be the location at which the immovable property or boat or vessel, as the case may be, is located or intended to be located."

Since the place of supply is the location at which the immovable property or boat or vessel, as the case may be, is located or intended to be located and in your case it is within taxable territory (India) only CGST and SGST are payable and IGST cannot be paid on such services.

In view of the above provisions IGAT charged by the Hydrabad hotel is not correct . CGST and SGST charged by Telegana hotel is correct. However credit of the same is not available to you located in Tamilnadu since such credit can be utilised within the state in which the service provider has gst registration.

[Nash Industries I Pvt Ltd]

Endorse the views.

Regards

S.Ramaswamy

[YAGAY and SUN]

In case you have branch over there then you may get ITC if you get such bills at your branch offices. 

[Praveen Nair]

Dear Experts

As per the Section 12(3), all billing by Hotel (within the taxable territory) is subject to CGST & SGST. What are the cases where hotel can charge IGST?

In view of the above query, from the Hyderabad hotel point of view, will they be asked to pay the GST again (CGST & SGST), since wrongly paid as IGST?

Since the customer is unaware of the fact, that IGST is incorrect, he will avail the credit. Will the customer be liable to interest on ITC claimed, if the hotel decides to revise their return?

CGST is a central tax, can ITC be claimed for CGST amount on the bill raised by Telangana hotel?

Regards

Pravin

[KASTURI SETHI]

Charging CGST and SGST is correct. ITC is available.

[YAGAY and SUN]

Charging of CGST + SGST is correct but not ITC would be available since location of provisions of services are at Hyderabad.

[KASTURI SETHI]

Agreed Sir.

AI Summary

Place of supply for lodging dictates intrastate tax treatment: hotel services taxed under central and state GST, not integrated GST.
The place of supply for lodging accommodation is the location of the immovable property; intrastate supplies should be invoiced with CGST and SGST and not IGST. A hotel in Hyderabad charging IGST on a bill citing a Tamil Nadu GSTIN is incorrect; CGST and SGST charged by a Telangana hotel is correct. Input tax credit of CGST and SGST charged by an out of state hotel is generally not available to a recipient registered in a different state unless the recipient has a registration or branch in the supplier's state where the invoice is accounted.