SGST credit taken from Hotel Bill

[Kalpessh Daftary]

We are registered under GST from Mumbai and we avail facility from Gujarat State ( We pay out Hotel bill Room tariff ) which has CGST amount and SGST amount classified in their bills. Are we liable to claim CGST and SGST against the said bills.

Kalpesh Daftary

[Rajagopalan Ranganathan]

Sir,

According to Section 12 (3) (b) 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. Therefore the supplier of service in Gujarat State is liable to charge CGST and SGST.

According to Section 49 (5) (e) & (f) of CGST Act, 2017 " the amount of input tax credit available in the electronic credit ledger of the registered person on account of the central tax shall not be utilised towards payment of State tax or Union territory tax and the State tax or Union territory tax shall not be utilised towards payment of central tax.

However the scheme of GST Act seems to be that GST Registration is State specific. Outside the State such person is an "un-registered person" .

In view of the above position you cannot avail ITC of CGST and SGST paid in Gujarat State.

[Ganeshan Kalyani]

You are not eligible to take credit in this situation.

[Alkesh Jani]

Dear Experts,

In this case, for my knowledge, can the person take ITC of CGST ignoring SGST?

Thanks

[Himansu Sekhar]

Please look into the Sec. 49(4) of SGST Act,2017 wherein it is written that:

(4) The amount available in the credit ledger may be used for payment towards the output tax under this Act........

It means MGST is different from GGST. The MGST cannot be utilised for GGST.

The tax invoice issued under Sec. 31 of MGST Act, will not be valid document for taking credit under Sec. 16 of the GGST Act.

Also there is no provision that CGST paid in one state will be carried to another state. For that purpose IGST is specified.

The clarification in the form of FAQ has bneen released for non availability of credit in this respect

[YAGAY andSUN]

In our view you cannot avail the ITC due to location of the provision of services.

[Alkesh Jani]

Sir,

In this regards, Please re-comment by considering the following points:-

1. Section 1(2) of CGST Act states that, it extends to whole of India….
2. While SGST states that, it extends to whole of (name of state)
3. Any person registered under CGST is deemed to register under SGST. Therefore, Invoice issued under CGST Act, shall be considered as Invoice issued under SGST Act.
4. The conditions for availing ITC is that, a person should be in possession of Invoice, goods and/or services are received by him, the supplier has made payment of tax to the account of Govt. and returns are filed.
5. Section 17 restricts from availing the ITC, but it is nowhere stipulated that CGST credit of one state cannot be taken and shall be utilize for CGST of the same state.

Thanks

AI Summary

Input tax credit for out-of-state hotel lodging unavailable where place of supply is another state and credits are segregated. Place of supply for lodging services is the location of the immovable property; a hotel in Gujarat charges local central and state components. Central and state tax credits are segregated and not mutually utilisable, so a registrant in another State cannot claim input tax credit for CGST/SGST charged on an out of state hotel bill.