Restaurant services

[VishnuPriya R]

In case of restaurant services, if they opt for 5% rate of GST for outward supplies by virtue of Notification No. 20/2019-Central Tax (Rate). They are not eligible for availment of ITC as per the notification. But however, if inadvertenly they have availed an ITC say for 2 months and subsequently found out the same and reversed the ITC along with interest. Can they still continue in 5% rate of tax or because they have availed inadvertenly ITC for 2 months and subseqently reversed the same, the benefit of 5% does not applicable to them and subsequently apply 18% on outward supply.

 

[KASTURI SETHI]

Dear Querist,

ITC taken and subsequently reversed  along  with interest tantamounts to "credit not taken". You can continue with 5% option.  You have reversed on your own. It proves your bona fides..

[Sadanand Bulbule]

I endorse the legal position expressed by Sh. Sethi Sir

[VishnuPriya R]

Thank you sir for the clarification

[Shilpi Jain]

Standalone Restaurants liable @5% only. Just because you may have taken credit for some period does not mean that you can pay GST @18%. There is a specific explanation in this regard in the rate notification itself.