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

Input tax credit on restaurant supplies: credit allowed for composite hotel packages but reversed for reduced-rate restaurant sales.
ITC on food and beverages for a hotel with a restaurant depends on supply character: ITC is available for food included as an element of a composite accommodation package, while ITC attributable to standalone reduced-rate restaurant sales must be reversed under the apportionment and reversal mechanism in the GST rules. ITC on employee food is allowable only where the statutory conditions in the Act permit it; notifications cannot override the Act, so take full ITC and reverse the portion attributable to non-creditable outward supplies.