Is it compulsory to pay GST liability on restaurant services through cash or taxpayer can utilized ITC of Hotel Accommodation Business. As per NN 11/2017 Entry 7 9963 – Condition is “Provided that credit of input tax charged on goods and services used in supplying the service has not been taken” – means there is bar on availment of ITC and not utilization. Like in Construction services of residential building – there is bar on both ITC and Compulsory Cash payment. Sir, what is your view on above issue.

Entry 7 to Notification No. 11/2017-CT(R) provides rate for restaurant services as 5% with the condition that credit of input tax charged on goods and services used in supplying the service has not been taken. The condition restricts availment of ITC against restaurant services, but not the use of ITC available from other output supplies for payment of output tax of restaurant services. In my humble opinion, ITC from other supplies as available with the person can be used for payment of output tax of restaurant services.