TaxTMI 
TaxTMI 
Dear Sir/Madam,
Can Restaurant holding Franchise, and leving GST on Foods Sales @5%, claim ITC for Royalty or any other input.
Can Restaurant Can Claim on input
08 Nov 2018 
4 Replies 
4443 Views Asked by
Input tax credit restriction precludes claiming ITC on royalty or inputs when reduced-rate supplies are treated as exempt turnover.
A restaurant franchisor/franchisee applying the reduced GST rate on food supplies cannot claim Input Tax Credit for royalty or other inputs because turnover under the reduced-rate category is treated as exempt turnover, triggering the statutory allocation and reversal mechanism for input tax credits which disallows credit attributable to such exempted turnover. (AI Summary)
A restaurant franchisor/franchisee applying the reduced GST rate on food supplies cannot claim Input Tax Credit for royalty or other inputs because turnover under the reduced-rate category is treated as exempt turnover, triggering the statutory allocation and reversal mechanism for input tax credits which disallows credit attributable to such exempted turnover. (AI Summary)