Admisibility of Input Tax Credit on Hotel Stay

[Kaustubh Karandikar]

XYZ (Maharashtra) had arranged a Customer meet in a Hotel in Bangalore towards sales promotion. The Hotel is ready to issue to separate bills viz. one for food and other for stay. The Hotel will be charging IGST in the invoice issued to XYZ in the name of XYZ, Maharashtra. Can XYZ take input tax credit against the bill for hotel stay?

AI Summary

Debate Over ITC Claim for Hotel Stay: Experts Dispute Proper Tax Charges Under GST Rules XYZ, a company from Maharashtra, organized a customer meeting at a hotel in Bangalore for sales promotion. The hotel agreed to issue separate bills for food and stay, charging IGST on the invoices. A user in the forum questioned whether XYZ could claim input tax credit (ITC) on the hotel stay bill. One expert argued that ITC is eligible as it is a business expense. However, others, including Alkesh Jani, contended that the hotel should charge CGST and SGST instead of IGST, as the service is intra-state. They advised against claiming ITC due to potential audit disputes.