RESTAURANT SERVICES

[SOPL SOPL]

Dear Sir/Madam

We are facilitating hotel accommodation services to our clients.First hotel raise invoice on our entity.Later we raise invoice on our client after adding some service charges.

In the hotel bill they charge for both food and accommodation.For accommodation hotel charges @ 12% and for food and beverages it charges @ 5%.

We are invoicing to our client with two line items , one for accommodation(including service charge) @ 12% and other for food charges @ 5% (including service charge).

Our query:

Whether we can claim input on food charges as it is covered under further supply as per proviso to section 17(5) clause (b).As per our understanding we are in trading of services.

Gst rate notification says input tax credit on goods and services is not allowed if gst is charged @ 5%.

Can a notification override Act ? Because act allows input in case of further supply.

We believe that for all the trading transactions input should be allowed.

AI Summary

Hotel Service Business Debates Eligibility to Claim ITC on Food Charges Under GST Notification and CGST Act A business facilitating hotel accommodation and food services to clients inquires about claiming Input Tax Credit (ITC) under GST. They receive invoices from hotels, which they then bill to their clients with added service charges. The concern is whether ITC can be claimed on food charges, given a GST notification restricts ITC at a 5% rate, despite the Act allowing it for further supply. Responses vary: some suggest ITC is not available due to the notification, while others argue the business may be eligible for ITC if services are part of a composite supply, citing the CGST Act.