Question: A Hotel & Restaurant is registered in GST as a normal taxpayer. How shall the ITC be taken and segregated as Restaurant is charged @5% without ITC? Whether we need to keep separate books or records for goods purchased in restaurant so that the ITC is not claimed?
Answer: The Input Tax Credit need to be apportioned between the taxable and exempt supplies as per rule 42. The entire turnover of the Restaurant shall be considered as exempt supply.
