WebSoftOSHow it works
Some supplies carry a condition that credit is not taken. For hotel rooms up to ₹7,500 a night, the 5% rate applies only where credit of input tax on the inputs used has not been taken, so GST on purchases becomes a cost for rooms in that band.
Mixed-rate businesses apportion credit between supplies that do and do not allow it, under section 17 of the CGST Act and rules 42 and 43 of the CGST Rules.
Frequently asked questions
Can a hotel claim ITC on rooms taxed at 5%?
No. The 5% entry applies only where credit of input tax on goods and services used in supplying the accommodation has not been taken.