GST RATE 18% ON RESTAURANT SERVICE

[VIPUL JAIN]

Hello,

I would like to understand

1.whether 5% GST rate without ITC is mandatory for a restaurant located in a hotel of which is having decalred tariff as ₹ 5000 per unit per day or can i opt to charge 18% GST on outward supply with ITC.?

2.If the restaurant is supplying cold drink can , will it be covered under restaurant service?

[Rajagopalan Ranganathan]

Sir,

As per Explanation at Sl. No. 7 (vi) (a) of Notification No. 11/2017-CT (Rate) dated 28.6.2017 as amended and Notification No. 8/2017-Integrated Tax (Rate) dated 28.6.2017 as amended payment of tax @5% is mandatory and there is no option to pay GST at a higher rate of 18% for availing of ITC.

The rate of tax on the supply of cold drink can is 5% without ITC.

[Shilpi Jain]

Agree with Rajagopalan sir.

In case you would not want to pay GST @ 5% you may have to file a Writ challenging the provision which makes it mandatory to pay @5% without ITC.

If not, it is mandatory to follow.

AI Summary

Reduced GST rate without ITC prevents choosing a higher rate with input tax credit for hotel restaurant supplies including cold drinks.
The notification-based rule makes the reduced GST rate without input tax credit mandatory for specified hotel restaurant supplies; there is no option to charge a higher GST rate with ITC for such supplies. Packaged cold drinks supplied by the restaurant are likewise subject to the mandatory reduced-rate-without-ITC treatment. The only practical alternative identified is to challenge the notification provision by writ.