Topics In Demand
Notification
New

No notification found.

Blog
Availability of IGST credits in respect of hotel accommodation

July 19, 2017

GST

7423

0

In this blog, we look at a query on whether IGST credits can be availed in respect of hotel accommodation, by obtaining an ISD registration.

 

Query:

We have a head office in Mumbai and 3 other branch offices. However, we have several meetings with clients across the country. For this purpose, we have entered into a contract with a Hotel chain having Hotels across various cities in the country. Can we ask such Hotels to issue an IGST invoice to the ISD registration applied for in the location where we have our Head Office?

Response:

No. The nature of supply would be an intra-State supply and consequently would be liable to CGST and SGST.

It is important to note that the nature of tax to be paid on a supply would be an interplay of (a) location of the provider of services and (b) place of supply of services. Where these are within the same State, it would be an intra-State supply; and where they are in different States, it would be an inter-State supply. Applying this rule is mandatory and not the choice of the recipient or the supplier.

With specific reference to accommodation in hotels, the place of supply is the State where the hotel is located – accordingly, all such supplies (accommodation) would always be intra-State supplies and hence would be liable to CGST and SGST. Therefore, the Hotelier cannot issue an invoice for IGST.

Additional comments: Where the recipient obtains a registration as an ISD in the State where the accommodation was taken; an ISD can distribute the credits accumulated on a monthly basis, by issuing an ISD invoice to the Head Office/ Branch(es) to which the service is attributable, in the proportion of their turnover.

Legislative reference: Section 19 of the CGST Act, 2017 read with Section 7, 8 and 12 of the IGST Act, 2017 and Rule 54 of the CGST Rules, 2017. 

Authors: Meghana Belawadi and NR Badrinath

 

  

With GST set to be implemented, www.withdia.com brings to you collaborative wisdom on the GST law and potential impact areas for your business. To read more such curated content or to give us your valuable feedback head to our webpage www.withdia.com, or download our Android/iOS app on your phone and have all this knowledge accessible on the go!


That the contents of third-party articles/blogs published here on the website, and the interpretation of all information in the article/blogs such as data, maps, numbers, opinions etc. displayed in the article/blogs and views or the opinions expressed within the content are solely of the author's; and do not reflect the opinions and beliefs of NASSCOM or its affiliates in any manner. NASSCOM does not take any liability w.r.t. content in any manner and will not be liable in any manner whatsoever for any kind of liability arising out of any act, error or omission. The contents of third-party article/blogs published, are provided solely as convenience; and the presence of these articles/blogs should not, under any circumstances, be considered as an endorsement of the contents by NASSCOM in any manner; and if you chose to access these articles/blogs , you do so at your own risk.


© Copyright nasscom. All Rights Reserved.