TMI Blog2024 (2) TMI 847X X X X Extracts X X X X X X X X Extracts X X X X ..... tue 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. Explanation (iv) 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 rules made thereunder. The applicant has not mentioned as to what other supplies are being made by them. Non mentioning of the details of such other supplies, if any, by the applicant has resulted in a situation wherein we can only state that if/since they are only providing restaurant services the question of availing ITC in respect of expenses incurred for general expenses of company, does not arise. However, if they are engaged in providing certain other supplies eligibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of heritage property Strategic business unit housed/Usage of premises Opposite Sidi Saiyed Jali, Old City, Ahmedabad. i) HMG [hotel rooms, spa swimming Pool] ii) Agashiye [restaurant] 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of pro rate turnover; that the restaurant service of the applicant cannot be considered as exempt supply and is a taxable supply; that they use the input, input services and capital goods for business purpose only and not for any other purpose; rate notification provides for prohibition of ITC and the said power is exercised u/s 16; the provisions 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. Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017 (12 of 2017), the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary in the public interest so to do. hereby notifies that the central tax. on the intra-State supply of services of description as specified in column (3) of the Table below, falling under Chapter, Section or Heading of scheme of classification of services as specified in column (2), shall be levied at the rate 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an consumption), as a part of such outdoor catering and such supply or service is for cash, deferred payment or other valuable consideration. 9 - (vi) 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 two thousand five hundred rupees and above but less than seven thousand five hundred rupees 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 - (vii) Supply, by way of or as part of any service or in any other manner whatsoever, of goods, including but not limited to food or any other article for human consumption or any drink (whether or not alcoholic liquor for human consumption), where such supply or service i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , clubs, campsites or other commercial places meant for residential or lodging purposes having declared tariff 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. 2.5 Provided that credit of input tax charged on goods and services used in supplying the service has not been taken [Please refer to Explanation no. (iv)] ; (b) for item (iii) in column (3) and the entries relating thereto in columns (3), (4) and (5), the following shall be substituted, namely :- (3) (4) (5) (iii) 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 any drink, where such supply or service is for cash, deferred payment or oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble, - (i) against serial number 7, in column (3),- (a) for item (i) and the entries relating thereto in columns (3), (4) and (5), the following shall be substituted, namely:- (3) (4) (5) (i) 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, other than those located in the premises of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes having declared tariff of any unit of accommodation of seven thousand five hundred rupees and above per unit per day or equivalent. Explanation 1. - This item includes such supply at a canteen, mess, cafeteria or dining space of an institution such as a school, college, hospital, industrial unit, office, by such institution or by any other person based on a contractual arrangement with such institution for such sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in supplying the service has not been taken [Please refer to Explanation No. (iv)] (iii) Supply of goods, being food or any other article for human consumption or any drink, by the Indian Railways or Indian Railways Catering and Tourism Corporation Ltd. or their licensees, whether in trains or at platforms. 2.5 Provided that credit of input tax charged on goods and services used in supplying the service has not been taken [Please refer to Explanation No. (iv)] (iv) Supply of 'outdoor catering', at premises other than 'specified premises' provided by any person other than (a) suppliers providing 'hotel accommodation' at 'specified premises', or (b) suppliers located in 'specified premises'. 2.5 Provided that credit of input tax charged on goods and services used in supplying the service has not been taken [Please refer to Explanation No. (iv)] (v) Composite supply of 'outdoor catering' together with renting of premises (including hotel, convention center, club, panda], shamian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplied. (xxxiii) 'Outdoor catering' 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, at Exhibition Halls, Events, Conferences, Marriage Halls and other outdoor or indoor functions that are event based and occasional in nature. (xxxiv) 'Hotel accommodation' means supply, by way of accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes including the supply of time share usage rights by way of accommodation. (xxxv) 'Declared tariff' means 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. (xxxvi) 'Specified premises' means premises providing 'hotel accommodation' services having declared tariff of any unit of accommodation above seven thousand five hundred rupees per unit per day or equivalent. . [Notification No. 3/2022-C.T. (Rate), dated 13-7-2022] [effectiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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) Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless,- (a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed; 1 '[(aa) the details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37;] (b) he has received the goods or services or both. 2 [ Explanation - For the purposes of this clause, it shall be deemed that the registered person has received the goods or, as the case may be, services- (i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 stated that they are providing restaurant services and discharging GST @ 5% by availing the benefit of notification 11/2017-CT (Rate) as amended. The notification along with its amendment are reproduced supra. What is in vogue today is notification No. 20/2019-CT (Rate) dated 30.9.2019, effective from 1.10.2019, |amending basic notification No. 11/2017-CT (Rate)] which states as follows: (ii) Supply of restaurant service' other than at specified premises' 2.5 Provided that credit of input tax charged on goods and services used in supplying the service has not been taken [Please refer to Explanation No. (iv)] From a bare reading of the condition stipulated above it is evident that the benefit of the exemption notification is available only if credit of ITC on goods and services used in supplying the service has not been taken. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 rules made thereunder. The applicant has not mentioned as to what other supplies are being made by them. Non mentioning of the details of such other supplies, if any, by the applicant has resulted in a situation wherein we can only state that if/since they are only providing restaurant services the question of availing ITC in respect of expenses incurred for general expenses of company, does not arise. However, if they are engaged in providing certain other supplies eligible for ITC, information of which we are not privy to, in such a situation explanation (iv) (b) of the basic notification No. 11/2017-CT (Rate) would apply and credit would be eligible subject to the same. 15. The second question on which ruling is sought by the applicant is whether they are entitled to enjoy the benefit of the input tax credit based on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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