Question

1 a)The output taxable services are being charged maximum at18%(hotel) but some input credit of goods is available at 28%, so these can be utilized or not, pl confirm with section.
b) The branch/sales office doing sales and collecting advances on behalf of hotel,the services liable to GST or not and if yes, how to value them. also, their salaries being paid by the hotel.
c) spoilage, brekage etc in hote, we have to reverse input credit of these items availed earlier, pl confirm with section.
d) complimentary food and stay to staff,director,auditor,consultant etc at Hotel, is it liable to GST, pl confirm with section. Advance authority has said that if company charges staff for the food, then it is liable for GST and if it does not charges anything, is it still liable.
2. has the GST annual return form and GST audit form been finalised.
3. tour/Travel agency bills at 5% and reecives bill for 5% and is taking input credit of the same, but can it take 18% credit of the CA bill.
4. A company registered in UP and providing engineering services to a a proprietor firm , the owner of which has 33% stake in the company registered in UP at a project in Gujarat including hiring part time employees there and then billing to them with IGST from UP. query is the company liable for taking registration in Gujarat, pl confirm with section
 

Answer

Point wise reply to your query is as follows:

1 a) ITC under GST can be availed subject to the condition that it is utilized for business or for furtherance of business. You can utilize the input credit of goods available on inward supplies @ 28% and you can also claim refund of unutilized credit under section 54 sub section 3(ii).

b) Branch is considered as distinct entity and services provided by branch to hotel is treated as taxable supply as per Schedule I clause (2) even if made without consideration.
Valuation is to be done as per Rule 28 of CGST Rules.

c) As per section 17(5)(h) credit shall not be available in respect of goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples. However this is normal breakage and is not restricted as the assets are put to use for business or furtherance of business. Therefore credit earlier availed is not required to be reversed on these items.

d) Complimentary food and stay to staff, director, auditor etc is treated as service provided by employer to employee. The same is taxable as per decision given by Kerala Authority of Advance Ruling in case of M/S Caltech Polymers Pvt. Ltd. If the company provides the above service free of cost then still it is a taxable supply as per Schedule I clause 2 subject to the limit of Rs 50000/-.

2. Till now GST annual return form and GST audit form has not been finalised. You will be informed as soon as the same will be notified.

3. As per Notification 11/2017 Central Tax (rate) vide s.no. 23 i.e. as follows
 

Where Explanation (iv) states that:
(iv) Wherever a rate has been prescribed in this notification subject to the condition that credit of input tax charged on goods or services used in supplying the service has not been taken, it shall mean that,-
(a) credit of input tax charged on goods or services used exclusively in supplying such service has not been taken; and
(b) credit of input tax charged on goods or services used partly for supplying such service and partly for effecting other supplies eligible for input tax credits, is reversed as if supply of such service is an exempt supply and attracts provisions of clause (iv) of section 20 of the Integrated Goods and Services Tax Act, 2017 read with sub-section (2) of section 17 of the Central Goods and Services Tax Act, 2017 and the rules made thereunder.
As there is a specified condition that ITC on goods and services cannot be taken except ITC on goods and service in same line of business. Therefore, no ITC is allowed on CA Bill.

4. You are requested to please elaborate your question. (Reply dt.23/08/2018)