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hotel and resursnt

27 December 2018

In resturant we set furniture and electronics for food supply. what is

impact of ITC?
This moveble capital good's ITC is eligible or ineligible.

Same in hotel- ITC of capital good's is eligible or ineligible.

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13 Replies

Prajwal Shetty (Artical Assistent) (237 Points)
Replied 27 December 2018

It is eligible with no restriction

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Hetal Shah (52 Points)
Replied 27 December 2018

explain in brief

Prajwal Shetty (Artical Assistent) (237 Points)
Replied 27 December 2018

if you are making supply which is fully taxable under Gst only (i.e. not supplying alcohol liquors for human consumption ) then full ITC on electronic and furniture can be claimed at once.

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Hetal Shah (52 Points)
Replied 27 December 2018

but no itc in resturant business ..
and if hotel tariff is less than 1000/- ,then it is exempt

Prajwal Shetty (Artical Assistent) (237 Points)
Replied 27 December 2018

Yes if tariff is less than Rs 1000, then that supply is considered exempt supply (i.e. supply not liable to Gst). if capital goods are used partially or fully for that supply then ITC has to be reversed proportionately or can not be claimed.

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ACA Sarita Laddha (Practicing CA) (1225 Points)
Replied 27 December 2018

In simple, if your output is taxable, you can claim input for all if its used for furtherance of your business and not specifically disallowed in law. If your output service or goods is partly exempt, ITC is available proportionately for taxable part.

Hetal Shah (52 Points)
Replied 27 December 2018

for capital goods or inputs also??

ACA Sarita Laddha (Practicing CA) (1225 Points)
Replied 27 December 2018

for all, Input, input service and capital goods and 100% in 1st year

Hetal Shah (52 Points)
Replied 27 December 2018

same for resturant business?? capital goods of furniture and oven and all

ACA Sarita Laddha (Practicing CA) (1225 Points)
Replied 27 December 2018

Going specifically for restaurants,

Restaurants would be divided into 3 categories

(i) Stand-alone restaurants

(ii) Restaurants in hotel premises

(iii) Outdoor catering

For Stand-alone restaurants, GST rate is 5% with no ITC i.e, ITC canot be claimed.

For Restaurants in hotel premises, if room tariff < 7,500, GST rate is 5% without ITC. If room tariff > 7,500, GST rate is 18% with availability of ITC.

For Outdoor catering, GST rate is 18% with availability of ITC.

Where ITC is availabe, Its available for all Input, Input servcie and Capital goods used for furtherance of business and if Input is not restricted.

Hope this would serve your purpose.

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Hetal Shah (52 Points)
Replied 27 December 2018

My question is for capital goods which we used in stand alone resturant. like furniture, ovens, fridge which use in resturant for taxable outward supply.
this ITC is allowed or not.

CS Advocate Abhishek Goyal (M Com FCS LLB M-AIMA ) (13809 Points)
Replied 27 December 2018

No ITC can be claimed in case of standalone restaurent, the GST rate is 5%

ACA Sarita Laddha (Practicing CA) (1225 Points)
Replied 27 December 2018

As per my last reply, since it's standalone restaurant, GST 5% will be applicable and no ITC will be allowed and its not optional. Its mandatory. Hence, in your case, no input will be allowed and you have to pay 5% GST on your output supply.