Can Restaurant Can Claim on input

[YUWRAJ KOTHARI]

Dear Sir/Madam,

Can Restaurant holding Franchise, and leving GST on Foods Sales @5%, claim ITC for Royalty or any other input.

[DR.MARIAPPAN GOVINDARAJAN]

In my view no.

[KASTURI SETHI]

I support the view of Dr.Govindarajan, Sir.

[CAHemanth Kumar]

Dear sir,

Rate of 5% is subject to ITC restriction. Therefore cannot claim ITC.

Further to note that ,this change is made by Notification No. 46/2017- Central Tax (Rate) dated 15.11.17 with an explanation that the turnover of 5% would be considered as exempted TO and reversal of ITC will be applicable in terms of section 17(2) read with rule 42 and 43 of CGST Rules, 2017

[YAGAY andSUN]

We endorse the views of our experts.

AI Summary

Franchise Restaurants Charging 5% GST on Food Sales Ineligible for ITC on Royalties or Inputs per Notification No. 46/2017. A restaurant holding a franchise and charging 5% GST on food sales cannot claim Input Tax Credit (ITC) for royalty or other inputs. This consensus is supported by multiple contributors in the discussion, who cite that the 5% GST rate is subject to ITC restrictions. This regulation is outlined in Notification No. 46/2017-Central Tax (Rate) dated 15.11.17, which explains that such turnover is considered exempt, requiring ITC reversal per section 17(2) and rules 42 and 43 of the CGST Rules, 2017.