GST - Place of Business - Guest House, Goods and Services Tax - GST

[Indirect Tax]

Assessee ABC ltd has GST registration in 2 states i.e. Maharashtra & Karnataka respectively. Earlier, the employees as well as foreign personnel of parent entity of the ABC Ltd used to stay in the Hotels of the Karnataka state for the business purpose. But since the Hotel Expenses started increasing, the management of ABC Ltd decided to take the Guest House on yearly rent Basis in Karnataka. The Question is whether ABC LTD can take GST Credit of same like of Hotel? Also whether is mandatory to add this guest house as additional place of Business.

The Guesthouse is used for meetings, stay purpose etc. for furtherance of Business.

Posts / Replies

[RaamSrinivasan Kalpathi]

In my considered view ABC Ltd is eligible to avail ITC on the Guest House tax invoice.  FYI, in one of our client's case we have even obtained refund of such ITC (the client was in the business of export of services).

Also, please note that if the Landlord of the guest house does not impute GST on his supply invoice (assume for a moment that the landlord's aggregate supply is below the GST turnover threshold), then the same will have to be remitted by ABC Ltd under RCM.

[Sadanand Bulbule]

In one case in Bengaluru, the GST authorities have disallowed crores of ITC on guest house rent under Section 17[5][c]& [d], even much before the Hon'ble Supreme Court judgement in Safari Retreat case. This needs careful approach or else you can go for Advance Ruling to be on the safer side.