TaxTMI 
TaxTMI 
2026 (1) TMI 1277
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.... Regulations, 2018. 1.1 At the outset, we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017 (the WBGST Act, for short) have the same provisions in like matter except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression 'GST Act' would mean the CGST Act and the WBGST Act both. 1.2 The applicant operates within the Event Management and Tourism Services industry. In the context of event management, the applicant is required to provide food and beverages, in addition to other services such as the rental of hotels or properties, and the organization of tours. These services are offered to corporate clients for offsite meetings, conferences, training programs, and similar events. 1.3 The applicant has made this application under sub-section (1) of section 97 of the GST Act and the rules made there under raisi....
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....ITC on Food and Beverage Services: • Section 17(5)(b)(i) disallows ITC on food and beverages unless used for making outward taxable supplies of the same category or as an element of a composite or mixed supply. • The applicant's outward supply is a taxable bundled service that includes food and beverages, thereby falling under the exception clause of the proviso. • As clarified in CBIC Circular No. 172/04/2022-GST dated 6th July 2022, ITC on food and beverages is allowed when part of a composite supply. (b) Requirement of Separate Invoice: • Section 16(2) requires possession of a valid tax invoice to claim ITC, but GST law does not mandate separate invoicing for each component. • A single itemized invoice (if available) or consolidated invoice covering room, food, and hall is sufficient, if GST is charged appropriately and other conditions under Section 16 are met. • Reference: CBIC Circular No. 123/42/2019-GST dated 11th November 2019. (c) Invoicing to Clients: • Section 8 of the CGST Act provides that in a composite supply, the tax rate of the principal supply applies to t....
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....ipal Supply is the Event Management Service (SAC 9983 or 9963), which attracts a mandatory 18% GST rate. Since the F&B is merely an auxiliary component of this principal 18% service, the blockage under Section 17(5)(b) is cured, and the ITC must be allowed. This position is supported by rulings such as that given to M/s. Indian Society of Critical Care Medicine. 1.3. Critical Compliance Requirement: The 18% Inward Rate The only non-negotiable factor is that the inward supply from the hotel must be charged at 18% GST. If the hotel charges the concessional 5% rate (applicable to Non-Specified Premises where ITC is not available to the hotel), the ITC cannot be passed on to the applicant, regardless of the applicant's eligibility under the Proviso, as demonstrated by the Gujarat AAR in the case of Mangaldas Mehta & Company Ltd.. 2. Argumentative Stances and Legal Bases (Question-by-Question) Question (1): Whether the applicant is eligible to avail Input Tax Credit (ITC) on inward supplies of food and beverages used for providing outward taxable bundled services such as event management, including conference room bookings and corporate events, where ....
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....: The entire service provided to delegates was treated as a single Composite Supply (SAC 998596 @ 18%). ITC on the entire consolidated bill amount, including the F&B component, was allowed, implicitly confirming that the composite nature overrides the need for itemized segregation. The law governing Composite Supplies dictates that the rate of the principal supply applies to the entire bundle. Since the F&B component is absorbed into the composite nature of the supply, the entire value, if charged at 18% GST by the hotel, is a creditable business input for the applicant's subsequent taxable supply. The absence of a separate line item for F&B does not invalidate the ITC claim, as there is no statutory mandate to bifurcate naturally bundled components for the purpose of claiming the exception under Section 17(5)(b). Question (3): Whether the applicant should: (a) Issue a single invoice for the entire event package (event management, accommodation, food) charging 18% GST; or (b) Issue separate invoices-one for event services @18% and another for food @5%-to comply with GST classification? Argumentative Stance Legal Basis Case Fac....
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....ce Legal Basis Case Facts and Judgment Full ITC is available on the entire "conference package" value (18%). The singular nature of the package mandates single tax treatment. The bundle constitutes a single inward Composite Supply to the applicant. Since the input F&B is procured solely as an integral element of this service and is used entirely for the applicant's 18% outward taxable supply, the full input tax is eligible for credit under the Proviso to Section 17(5)(b)(i). Judicial Recognition of Composite Nature: Pre-GST rulings established that the supply of a Banquet Hall along with catering is functionally a single, composite service (e.g., Sayaji Hotels Ltd.). Contextual Application: This supports the argument that the lack of internal segregation on the supplier's invoice does not invalidate the ITC claim when the nature of the service received is inherently composite and charged at the 18% rate required for credit pass-through. The prerequisite is the 18% tax rate. If the hotel has applied 18% GST to the consolidated amount, the entire value is considered a creditable expense for the applicant's commercial activity. ....
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....arding admissibility of ITC on such inward supplies. 3. Submission of the Revenue 3.1 The concerned officer has not expressed any view on the merit of the instant case. 4. Observations & Findings of the Authority 4.1 We have gone through the records of the issue as well as submissions made by the authorized representative of the applicant during personal hearing. The Revenue has made no submission on the merit of the case. 4.2 As per the statement furnished, the applicant is engaged in event management and tours and travel Services. The areas of activities of the applicant include booking of hotels, conference rooms and arranging meals for participants as part of a comprehensive business package. The Applicant is also required to provide other services such as the rental of hotels or properties, and the organization of tours. These services are offered to corporate clients for offsite meetings, conferences, training programmes and similar events. The applicant procures the above services from the hotels . They provide bundled services to the applicant. The bundled services provided to the applicant include room accommodation, provision for conference space and foo....
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....e services. The applicant has argued that Section 16(2) of the CGST Act stipulates that a registered person can claim ITC only if they are in possession of a tax invoice or deemed tax invoice issued by a supplier. There is no explicit requirement under GST law mandating separate invoices for different components of a bundled supply. A single itemized invoice from the hotel, clearly detailing the charges for room rent, conference hall, and food, is sufficient for the applicant to claim ITC on all components, provided the invoice complies with the requirements of Section 16(2). 4.5 The first issue placed before us is related to the eligibility of Input Tax Credit (ITC) on food and beverage services under Section 17(5) in event management and tourism services. The applicant is engaged in event management and tours and travel services. For event management services as a comprehensive package the applicant has to undertake the responsibility of booking hotels, conference rooms and arranging meals for participants. These services are offered to corporate clients for offsite meetings, conferences, training programmes and similar events. As we know, the eligibility for ITC h....
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.... (ab) ....................................................... (b) the following supply of goods or services or both- (i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, leasing, renting or hiring of motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) except when used for the purposes specified therein, life insurance and health insurance: Provided that the input tax credit in respect of such goods or services or both shall be available where an inward supply of such goods or services or both is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply; (emphasis added) 4.6 So the pertinent question is whether the service provided by the applicant in the form of event management and tourism services is either a composite supply or a mixed supply. Reply to this question is a key to answer some other questions raised in this application for advance ruling. First of all, we should look into the definition of composite supply as provided in Section 2(30) ....
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....t of the cases it comes as a package consisting of all the things mentioned above. So it appears that event management involves supply of various kinds of goods and services in a bundled form. It satisfies the definition of composite supply under section 2(30) supra. Here the principal supply is management of event and other supplies of goods and services e.g. provision of food and beverages, booking of venue, booking of hotel rooms etc. are all ancillary services. 4.7 Once it is decided that event management service is a composite supply, the next point to be considered is whether in the applicant's case ITC on food and beverages being part of further composite supply of event management attracts the proviso to Section 17(5)(b)(i). The proviso mandates that the registered person must either make an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply in order to get the benefit of the proviso. In our case the applicant makes an outward supply of event management which is taxable supply and foods and beverages are supplied as an element of outward composite supply of event management. So in our consid....
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....the customer but the tax rate is to be charged according to the principal supply i.e. supply of event management services. 4.10 The applicant has referred to a specific situation where the hotel supplies food to the applicant and raises invoice for food to the applicant and the applicant supplies the same to his client adding a margin. Here the food is used by the applicant either for making further taxable supply of food or as an element of taxable composite supply of event management services. In our considered view, in both the cases the applicant is eligible for ITC subject to the provisions of Section 16 of the CGST Act, 2017. However, it should be noted that in case the applicant is using this food as an element of composite supply ibid the invoice of the applicant issued to his customer must charge the rate of tax applicable to the principal supply as determined in the foregoing parts of our discussion for the whole consideration including food. Here the factor of adding margin over the value paid to the hotel for food does not have any specific impact both in terms of the nature of outward supply of the applicant and his eligibility for ITC. In view of the foregoing d....