Question12: Whether input tax credit is available on GST paid on room rent in a hotel. Please clarify

Answer: The ITC on some items is blocked/disallowed through Section 17 Section 17(5) contains as follow Section 17(5)

b) the following supply of goods or services or both:'

(i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery except where an inward supply of goods or services or both 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 or as an element of a taxable composite or mixed supply;

(ii) membership of a club, health and fitness centre;

(iii) rent-a-cab, life insurance and health insurance except where '' 

(A) the Government notifies the services which are obligatory for an employer to provide to its employees under any law for the time being in force; or

(B) such inward supply of goods or services or both 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 or as part of a taxable composite or mixed supply; and

(iv) travel benefits extended to employees on vacation such as leave or home travel concession The above mentioned section nowhere restrict ITC of room rent Further if GST is paid for room rent and food is provided in package of rent then credit will be allowed of full amount.(Reply dt. 17/11/2017)