Order Date – 03 February 2024

Facts – 

• The Applicant, Mangaldas Mehta & Company Ltd, runs restaurant in the same premises where the hotel rooms are situated. The applicant also has a banquet in the same premises. 

Issue – 

• Whether ITC can be claimed on expenses incurred for the general expenses of the Company which are meant for the purpose of business?

Order – 

• The AAR observed that the a conjoint reading of the facts  with the wording in the notification under which the applicant discharges GST, depicts that the applicant by virtue of providing restaurant service at a premises other than at a specified premises is eligible for availing the benefit of the notification subject to the condition that input tax charged on goods and services used in supplying the service has not been taken.
• The applicant has not mentioned as to what other supplies are being made by them. Non mentioning of the details of such other supplies, if any, by the applicant has resulted in a situation wherein it can only state that if/since they are only providing restaurant services the question of availing ITC in respect expenses incurred for general expenses of company, does not arise. However, if they are engaged in providing certain other supplies eligible for ITC, information of which are not privy to, in such a situation explanation (iv) (b) of the basic notification No. 11/2017-CT (Rate) would apply and credit would be eligible subject to the same.
• If the applicant is engaged in providing certain other supplies eligible for ITC, information of which are not privy to, in such a situation explanation (iv) (b) of the basic notification No. 11/2017-CT (Rate) would apply and credit would be eligible subject to the same. The credit however, shall be restricted in terms of section 17(2) of the CGST Act, 2017. The manner of determination of ITC in respect of inputs or input services and reversal thereof would clearly be governed by Rule 42 of the CGST Rules, 2017. Likewise, in the manner of determination of ITC in respect of capital goods and reversal thereof would clearly be governed by Rule 43 of the CGST Rules, 2017.