Can you claim ITC on Food

Know Whether you can claim Input Tax Credit on Food?

The input tax credit on food and beverage supplies are blocked credit for registered person. However, there are certain exceptions wherein the register person can claim ITC on food.

Input Tax Credit Exceptions on Food

The registered person can claim ITC on food,
– In addition, where an inward supply of goods or services or both of food of a particular category. Furthermore, it 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 mix supply then the input tax is allowed.

Also Read: Relevance of Supply under GST

Input Tax Credit on Food

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
– Moreover, foods as goods are stolen, lost, destroyed, written off or disposed of by way of gift or free samples.

Also Read: Rules related to setting off Input Tax Credit

Input Tax Credit on Food

Can ITC be claimed on food used for business purposes?

The registered person can claim ITC where inward supply is obtain from a registered supplier like a register person in the course or furtherance of business . Furthermore, the tax invoice must duly issue and supply made. Therefore, ITC is available if the supply is obtain for any purpose in the course or furtherance of business.

Also Read: Can you claim GST ITC on travel?

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 register trademark or brand name, then GST will be applicable. In addition, the company can claim ITC, if the taxable invoice has been issued.

Yes, restaurant registered as normal tax payer are eligible to claim ITC. Furthermore, 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. In addition, water comes under personal consumption. Therefore, No ITC will be available.

Conclusion

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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