Question

One of our restaurant owner is having input tax credit on and before 15.11.2018, the date on which rate of tax was fixed @ 5% without claiming any ITC. Can he take credit of opening ITC while discharging liability after 15.11.2018 of GST.

Answer

We understood that your query is related to ITC on or before 15.11.2017 as the rate of tax 5% is fixed wef 15.11.2017 vide Notification No. 46/2017 Central Tax ( Rate) but you have written it as from 15.11.2018. So our reply with respect to this notification is as follows:

W.e.f 15-11-2017 the rate of tax on restaurants is fixed @ 5% vide Notification no. 46/2017 Central tax (Rate) with a condition that credit of input tax charged on goods and services used in supplying the service has not been taken.

In view of above wef 15-11-2017 you are not eligible for taking ITC of goods or services which you are using for providing restaurant services even if goods or services are procured before 15-11-2017 and the credit of the same is shown in your credit ledger because the eligibility of take the credit will lapse wef the date of notification.

However you can utilize that credit for paying any liability for period before 15-11-2017.

If we misunderstood your question then please revert back to us. (Reply dt.23/11/2018)