TaxTMI 
TaxTMI 
TaxTMI 
2024 (2) TMI 847
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....ant] iii) Green House (restaurant] iv) Gammat [kids play area] v) Dev Viman [Banquet] vi) Style shop [Retail outlet selling antique goods & other items] vii) Kitchen viii) Concierge Raipur, Old City Pol Kholi (HMG-1, HMG-2 ie Hotel rooms] 3. The applicant has a demarcated area for the heritage hotel room, kitchen, courtyard & restaurant. As the declared tariff of the applicant falls below Rs. 7500/- the applicant charges 5% GST on the restaurant services. 4. The applicant by virtue of the mandatory rate of 5% GST for restaurant service, is not entitled to claim ITC for the restaurant service & provisions of section 16 of the CGST Act, 2017, do not apply to the applicant in so far as the restaurant business is concerned. 5. The applicant has further stated as follows: * that they have to incur huge expenditure for upkeep and maintenance of heritage property; * that they capitalize the expenses along with GST & for revenue expenditure incurred they intend to claim ITC; * that there are usual running expenses which have also suffered GST; * that in view of the heritage status of the premises, they can neither alter, demolish or make structural alterations of t....
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....ovisions of section 17 does not apply to restaurant business & consequently Rule 42 would not come into play. 6. In light of the foregoing submissions, the applicant has sought advance ruling on the below mentioned question viz (i) Whether the applicant is entitled to claim input tax credit of the expenses incurred for the general expenses of the Company which arc meant for the purpose of business? (ii) Whether the applicant is entitled to enjoy the benefit of the input tax credit based on the square foot & area of usage of the premises? (iii) Whether the provisions of Rule 42/43 of the CGST Rules, read with SGST Rules are not applicable to the claim of the input tax credit of the applicant as the declared tariff of the hotel rooms never exceeds Rs. 7499/- at any time during the year. 7. Personal hearing in the matter was held on 29.08.2023 wherein the applicant was represented by Shri Soham Mashruwala, CA and Shri Bipin Mistry, Deputy Finance Officer of the applicant. They reiterated the submission made in the application. A further hearing in the matter was held on 9.1 1.2023 wherein Shri Soham Mashruwala, CA appeared along with Shri Bipin Mistry, Deputy Finance Officer o....
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....as specified in the corresponding entry in column (4), subject to the conditions as specified in the corresponding entry in column (5) of the said Table:- TABLE SI.No. Chapter, Section or Heading Description of Service Rate (per cent.) Condition (1) (2) (3) (4) (5) 7 Heading 9963 (Accommodation, food and beverage services) (i) Supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or drink, where such supply or service is for cash, deferred payment or other valuable consideration, provided by a restaurant, eating joint including mess, canteen, neither having the facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year nor having licence or permit or by whatever name called to serve alcoholic liquor for human consumption. 6 - (ii) Accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes having declared tariff of a unit of accommodation of one thousand rupees and above but less than two thousand five hundred rupees per unit per day or e....
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....sumption or any drink (whether or not alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration, in a premises (including hotel, convention center, club, pandal. shamiana or any other place, specially arranged for organising a function) together with renting of such premises. 9 - (viii) Accommodation in hotels including five star hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes having declared tariff of a unit of accommodation of seven thousand and five hundred rupees and above per unit per day or equivalent. 14 - Explanation. - "declared tariff' includes charges for all amenities provided in the unit of accommodation (given on rent for stay) like furniture, air conditioner, refrigerators or any other amenities, but without excluding any discount offered on the published charges for such unit. (ix) Accommodation, food and beverage services other than (i), (ii), (iii), (iv), (v), (vi), (vii) and (viii) above. 9 - * [Notification No. 46/2017-C.T. (Rate), dated 14-11-201....
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....iff of any unit of accommodation of seven thousand five hundred rupees and above per unit per day or equivalent. Explanation. - "declared tariff" includes charges for all amenities provided in the unit of accommodation (given on rent for stay) like furniture, air conditioner, refrigerators or any other amenities, but without excluding any discount offered on the published charges for such unit. 9 -"; (c) the item (iv) in column (3) and the entries relating thereto in columns (3), (4) and (5), shall be omitted; (d) in item (ix), in column (3). for the entry, the following entry shall be substituted, namely "(ix) Accommodation, food and beverage services other than (ii), (iii). (v), (vi). (vii) and (viii) above. Explanation. - For the removal of doubt, it is hereby clarified that, supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or drink, where such supply or service is for cash, deferred payment or other valuable consideration, provided by a restaurant, eating joint including mess, canteen, whether for consumption on or away from the premises where such food or any other articl....
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....v)] (b) in items (ii), (vi) and (viii),- (A) for the words "declared tariff wherever they occur, the words "value of supply" shall be substituted: (B) the Explanation shall be omitted: (c) for item (v). and the entries relating thereto in columns (3). (4) and (5). the following shall be substituted, namely :- (3) (4) (5) "(v) Supply, by way of or as part of any service, of goods, being food or any other article for human consumption or any drink, at Exhibition Halls. Events. Conferences, Marriage Halls and other outdoor or indoor functions that are event based and occasional in nature. 9 -"; * (Notification No. 20/2019-C.T. (Rate), dated 30-9-2019} [effective from 1.10.2019] CGST rates for intra-State supply of specified services Amendment to Notification No. 11/2017-C.T. (Rate) In the said notification, - (i) in the Table,- (a) against serial number 7, for the entries relating thereto in column (3), (4) and (5), the following items and entries shall be substituted, namely. - (3) (4) (5) "(i) Supply of 'hotel accommodation' having value of supply of a unit of accommodation above one thousand rupees but less than or equal to seven thousand five hu....
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.... per unit per day or equivalent. (d) This entry covers supply of 'outdoor catering', provided by suppliers providing 'hotel accommodation' at 'specified premises', or suppliers located in 'specified premises'. (e) This entry covers composite supply of 'outdoor catering' together with renting of premises (including hotel, convention center, club, pandal. shamiana or any other place, specially arranged for organising a function) provided by suppliers providing 'hotel accommodation' at 'specified premises', or suppliers located in 'specified premises'. 9 -"; (iii) in paragraph 4 relating to explanation, after clause (xxxi). the following clauses shall be inserted, namely:- "(xxxii) 'Restaurant service' means supply, by way of or as part of any service, of goods, being food or any other article for human consumption or any drink, provided by a restaurant, eating joint including mess, canteen, whether for consumption on or away from the premises where such food or any other article for human consumption or drink is supplied. (xxxiii) 'Outdoor catering' means supply, by way of or as part of any serv....
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....sion or vocation: (h) activities of a race club including by way of totalisator or a license to book maker or activities of a licensed book maker in such club; and] (i) any activity or transaction undertaken by the Central Government, a Slate Government or any local authority' in which they are engaged as public authorities; (108) "taxable supply" means a supply of goods or services or both which is leviable to tax under this Act; (47) "exempt supply" means supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under section 11, or under section 6 of the Integrated Goods and Services tax Act, and includes non-taxable supply; * Section 16. Eligibility and conditions for taking input Tax credit.- (1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person. (2) Notwithst....
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.... Provided also that the recipient shall be entitled to avail of the credit of input tax on payment made by him of the amount towards the value of supply of goods or services or both along with tax payable thereon. * Section 17. Apportionment of credit and blocked credits.- (1) Where the goods or services or both are used by the registered person partly for the purpose of any business and partly for other purposes, the amount of credit shall be restricted to so much of the input tax as is attributable to the purposes of his business. (2) Where the goods or services or both are used by the registered person partly for effecting taxable supplies including zero-rated supplies under this Act or under the Integrated Goods and Services Tax Act and partly for effecting exempt supplies under the said Acts, the amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies including zero-rated supplies. 12. We find that the first question on which ruling is sought is whether they are entitled to claim ITC of the expenses incurred for the general expenses of the Company which are meant for the purpose of business. The applicant has st....
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....t, 2017 and the rules made thereunder. 13. A conjoint reading of the facts mentioned above with the wording in the notification under which the applicant discharges GST, depicts that the applicant by virtue of providing restaurant service at a premises other than at a specified premises is eligible for availing the benefit of the notification subject to the condition that input tax charged on goods and services used in supplying the service has not been taken. 14. So, the applicant is not eligible to claim ITC incurred in respect of restaurant service. The applicant has sought a ruling as to whether they are entitled to claim ITC of the expenses incurred for the general expenses of the Company. Here we find that explanation (iv) reproduced supra would come to play meaning thereby that credit of input tax charged on goods or services used exclusively in supplying restaurant service is not eligible. Further, credit of input tax charged on goods or services used partly for supplying such service and partly for effecting other supplies eligible for ITC, is reversed as if supply of such service is an exempt supply attracting provisions of section 17(2) of the CGST Act, 2017 and the ru....