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?

AI Summary

Hotel Industry Must Proportion ITC Claims for GST on Rooms and Exclude Liquor Sales Under GST Rules A client in the hotel industry, which includes liquor sales and rooms with varying tariffs, inquired about claiming Input Tax Credit (ITC) under the Goods and Services Tax (GST) framework. The question was whether ITC could be fully claimed on inward supplies or if it should be proportionally adjusted, especially considering rooms priced below 1000 and liquor sales. Two responses indicated that ITC should be taken proportionately. Since GST applies to room rent but not to liquor sales, ITC can only be claimed for the GST-applicable portions, aligning with the views expressed by both respondents.