ITC on inputs by Hotel having restaurant also

[IRFAN MALIK]

Query relating to ITC on F&B material purchased by hotel (having restaurant):

I have a hotel with restaurant in its premises. Following are GST sales:-

1. Accommodation with breakfast (package sales) - GST charged by hotel is 12/18%
2. Accommodation with breakfast & lunch/dinner (package sales) - GST charged by hotel is 12/18%
3. Direct restaurant sales - GST charged is 5%

In such case how to claim ITC on F&B item as no ITC is allowed if GST charged is 5% but package sales include breakfast/lunch/dinner & GST charged is 12/18%

my 2nd query is Hotel also provide breakfast,lunch & dinner to its employees (hotel + restaurant staff). Can I claim ITC on inputs for providing food to employees. Food is provided free of cost to employees.

Plz suggest.

thanking in anticipation.

regards

AI Summary

Hotel Owner Seeks Clarity on Input Tax Credit for Mixed Sales Under GST; ITC Allowed on Packages, Not Restaurant Sales A hotel owner inquires about claiming Input Tax Credit (ITC) on food and beverage (F&B) purchases under the Goods and Services Tax (GST) regime, given their mixed sales structure. For package sales that include meals, GST charged is 12/18%, allowing ITC claims. However, for direct restaurant sales with 5% GST, ITC is not allowed, requiring reversal of ITC per CGST rules. Regarding meals provided to employees, ITC can be claimed if mandated by law, despite the 5% GST charge. Respondents advise availing ITC on package sales and reversing it for 5% GST supplies.