Question11:

One of our clients is running restaurant and also supplying goods as outdoor caterers in industrial canteens and offices. The rate of tax was 18% in both cases with ITC. Now as per notification no 46, the rate of restaurant and canteen has been reduced to 5% with no ITC. Now the question is :  

1. Whether we can keep rate of tax @ 18% and continue to avail full ITC.?

2.  Whether tax rate of 5% is applicable on outdoor catering and on industrial canteens also?

3. Can we use ITC in outdoor catering and on industrial canteens? 

Answer:

1. The notification is conditional in nature and will apply only if the conditions given in the notification are fulfilled So if you are taking ITC you are breaking the condition and disqualified for the benefit given by the notification and the normal tax otherwise applicable to service will be charged.  

2.  Tax rate of 5% is applicable to both

3.  Please give more detail of question (Reply dt. 27/11/2017)