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Input Tax Credit On Food? – Know Whether You Can Claim
The input tax credit on food and beverage supplies are blocked credit for registered person. However, there are certain exceptions wherein the registered person can claim ITC on food.
Input Tax Credit Exceptions On Food
The registered person can claim ITC on food,
- where an inward supply of goods or services or both of food of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or both,
- Also, if such inward supply of food is used in making a taxable composite or mixed supply then the input tax is allowed.
Cases Where ITC On Food Is Not Available:
The input tax credit on food is not available in following cases:
- Goods or services or both of food are used for personal consumption
- Foods as goods are stolen, lost, destroyed, written off or disposed of by way of gift or free samples.
Can ITC Be Claimed On Food Used For Business Purposes?
The registered person can claim ITC where inward supply is obtained from a registered supplier by a registered person in the course or furtherance of business . Further, the tax invoice must be duly issued and supply must be made. Therefore, ITC is available if the supply is obtained for any purpose in the course or furtherance of business.
GST Rates On Food And Beverage Services:
Particulars | GST Rates |
Foodservices provided by restaurants including takeaway facility (both air-conditioned and non a/c) | 5% with no ITC |
Any food/drink served at cafeteria / canteen / mess operating on a contract basis in the office, industrial unit, or by any school, college, etc on basis of a contractual agreement that is not event-based or occasional | 5% with no ITC |
Services provided by restaurants within a hotel with room tariff less than Rs. 7,500 | 5% with no ITC |
Services provided by restaurants within a hotel with a room tariff of Rs. 7,500 or more | 18% |
Meals/food services provided by Indian Railways / IRCTC or their licensees both in trains or at platforms | 5% with no ITC |
Food services provided in a premise arranged for organizing function along with renting of such premises | 18% |
Food services provided at exhibitions, events, conferences, outdoor & indoor functions that are event-based or occasional in nature | 18% |
Other Accommodation, food, and beverage services | 18% |
Rates Of GST on Food Items
Particulars | GST Rates |
Fresh/chilled vegetables such as potatoes, onions, garlic, leek, etc. | NIL |
Non-container dried leguminous packed vegetables(shelled) whether skinned/split or not | NIL |
Fruits such as fresh grapes, fresh/dried coconut, fresh/dried bananas/plantain, fresh apples, fresh pears, etc. | NIL |
Non-veg items such as meat (not in a container, whether fresh or chilled) | NIL |
Eggs in the shell (fresh / cooked / preserved) | NIL |
Unsweetened milk (pasteurized / unpasteurized), cream, etc. | NIL |
Container packed vegetables (uncooked / steamed / boiled) | NIL |
Vegetables preserved using brine/other means unsuitable for immediate human consumption | NIL |
Meat packed in a container having a registered trademark or brand name | 5% |
Eggs not in shell/egg yolks boiled or cooked by steaming | 5% |
Dried leguminous vegetables packed in a container having a registered trademark/brand name (skinned/split or not) | 5% |
Vegetables such as ginger (excluding fresh ginger), turmeric (excluding fresh turmeric), thyme, curry leaves, bay leaves, etc. | 5% |
Food such as meal/powder of dried leguminous vegetables | 5% |
Fruits, vegetables, nuts, and edible plant parts preserved using sugar | 12% |
Vegetables, fruits, nuts, and edible parts of the plant that are preserved/prepared using vinegar / acetic acid. | 12% |
Food items prepared using flour, malt extract, etc. including cocoa less than 40% of total weight. | 18% |
Chocolate and other cocoa products | 18% |
FAQs
If coffee and tea are packed in a packet having registered trademark or brand name, then GST will be applicable. And, the company can claim ITC, if the taxable invoice has been issued.
Yes, restaurant registered as normal tax payer are eligible to claim ITC. As an inward supply of goods or services are used for making an outward taxable supply.
No, ITC will not be available. Reason being that “goods or services or both used for personal consumption” will not be entitled for ITC. Water comes under personal consumption. Therefore, No ITC will be available.
Summary:
The input tax credit on food is not allowed under GST. However , if the outward supply is made under a registered brand name and put up in unit container, then it would be liable to tax.
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