ITC eligibility of restaurant when food is purchased from another restaurant

[ArvindKumar P]

A chain of restaurants has one central kitchen in Pondicherry (close to the Tamilnadu border) for supplying food (in fully cooked and semi-coooked form) to outlets located in Pondicherry. Since one outlet in Tamilnadu is located near the Pondicherry border, food from this main kitchen is also supplied to the outlet in Tamilnadu for which 5% IGST is charged by the Pondicherry Main Kitchen. The outlet located in Tamilnadu receives the food from Pondicherry Main Kitchen and uses it to supply food to end consumers who visit the outler. Can the Tamilnadu outlet avail ITC on the food received from Pondy Main Kitchen since it is being used by it to resupply the same food to end consumers by charging 5% GST?

AI Summary

Restaurant Chain Faces ITC Denial for Food Supply; Industry Confusion Over Taxability Under Notification No. 11/2017 A restaurant chain with a central kitchen in Pondicherry supplies food to its outlets, including one in Tamilnadu, charging 5% IGST. The Tamilnadu outlet seeks to know if it can claim Input Tax Credit (ITC) on this food, which is resupplied to customers with 5% GST. Responses indicate that ITC is not available for restaurant service providers under Notification No. 11/2017. One participant suggests advocating for policy changes due to industry taxability confusion, questioning if the supply from Pondicherry qualifies as a restaurant service taxed at 5%.