ITC eligibility of restaurant when food is purchased from another restaurant, Goods and Services Tax - GST

[Palanisamy KS]

A chain of restaurants has one central kitchen in Pondicherry (close to the Tamilnadu border) for supplying food (in fully cooked and semi-coooked form) to outlets located in Pondicherry. Since one outlet in Tamilnadu is located near the Pondicherry border, food from this main kitchen is also supplied to the outlet in Tamilnadu for which 5% IGST is charged by the Pondicherry Main Kitchen. The outlet located in Tamilnadu receives the food from Pondicherry Main Kitchen and uses it to supply food to end consumers who visit the outler. Can the Tamilnadu outlet avail ITC on the food received from Pondy Main Kitchen since it is being used by it to resupply the same food to end consumers by charging 5% GST?

Posts / Replies

[Kiran Tahelani]

According to sr. no 7 of the Notification no 11/2017 read with explanation no (iv), ITC is not available to the restaurant service provider.

[Padmanathan Kollengode]

Agree with Ld expert. No ITC can be availed where the food is supplied to customer at 5%.

[Shilpi Jain]

Maybe a representation should be made to the Govt. to enable credit in this regard. Also there is lot of confusion regarding taxability for this industry.

Whether at all the supply made by the Pondicherry unit can be regarded as a restaurant service and so taxing it at 5%?