Question17:

A hotel has 100 rooms of tarrif below Rs 7500 and 2 suites rooms whose tarrif is above Rs 7500 hotel is running a restaurant in its premises also . can it charge 18% gst on restaurant services being  run in its premises ( as two rooms tariff are above Rs 7500)  and can claim benefit of ITC as per notf 46/2017.

Answer:

The notification says as follow

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 other valuable consideration, 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, located in the premises of hotel s , 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. - '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.

The notified rate of 18% applied with ITC if any unit  (without diffrenciation whether room or suits room)  is with declared tariff of  7500 or more So you will have two charge 18% and iTC will be available  It is not your choice but the tax rate of 18% will apply. (Reply Dt. 28/12/2017)