Input Tax Credit

[VIGNESH]

Sir. Client is running a hotel industry with bar (liquor sales), he has rooms below tariff ₹ 1000/ and above ₹ 1000/-also, can he claim ITC fully on his inward supply of goods and services or he has to proportionately take i.e. rooms below 1000/- and liquor sales ITC should be reversed or lapsed?

[KASTURI SETHI]

Proportionate ITC is to be taken.

[Ganeshan Kalyani]

On room rent there is GST and on sale of liquor no GST. So, ITC proportionate to room rent can be taken. I agree with the views of Sri Kasturi Sir.

AI Summary

Input Tax Credit proportionate allocation required where accommodation is taxable but liquor sales attract no GST.
Credits are available only to the extent inward supplies relate to taxable outward supplies; room rentals that attract GST permit proportionate ITC, while supplies on which no GST is charged (liquor sales) require exclusion or reversal of the corresponding ITC.