Question: A hotel with Restaurant and tariff below 7500/- has to mandatorily go for 5% without ITC for restaurant service. The hotelier is liable to book input and reverse the ITC subsequently or is ineligible to book ITC for inputs and input services related to restaurant?
Ans: ITC with respect to restaurant cannot be availed by the Hotel which is running a restaurant as well. Whereas where the ITC is with respect to the Hotel and restaurant then the proportionate ITC with respect to Hotel only can be availed by the Hotel and proportionate ITC with respect to restaurant will have to be reversed.
