Input tax credit for tour operator

Hi,

GST @ 5% has been applied on services of tour operator without benefit of Input Tax Credit (ITC) on goods and services. 

So, there is no way to avail ITC.

If you are charging 5% GST then you can't claim ITC, however if you want to claim ITC you need to charge GST at 18%.

Hope you find the information helpful, if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you.

The rate will be 5% without ITC and 12% with ITC. The limit are Rs. 750 from single person and if he has hired full carriage then Rs. 1500.

Hi,

- In case output supply if of transportation of passengers there is no bar on availing ITC on the buses purchased irrespective of the fact that the seating capacity is more than 13 passengers.

- If the other person is unregistered in the GST and is not liable to pay GST on GTA services then it is the liability of the GTA to pay the tax.

Thanks

Yes he can claim but as you saying that till now he was not taking ITC and was paying tax under 5% then the limit to avail credit would have lapsed.

Anyways now he cant claim ITC on buses purchased. In future if he purchases bus then he can claim credit and pay tax @12%.

No, he can not avail input tax credit for buses purchased.

With respect to taxable services provided by GTA, it has the following 2 options:

-5% GST with no ITC

-12% GST with ITC(liable to pay 12% tax on all the services of GTA supplied by it)

It means if GTA wants to take credit of GST paid by him then he should collect 12% GST on all the services of GTA supplied by it. Alternatively he can collect 5% GST from his customers provided that credit of input tax charged on goods and services used in supplying the service has not been taken.

However in both of the above cases recipient can avail the credit of tax paid by him.

The crux is ITC is available on the buses purchased by tour operator as they fall in the definition of transportation of passengers.

I don't think you can now convert your registration which you had undertaken in 2017-18 as tour operator without ITC and claim ITC for that year as the decision needs to be taken in the beginning of year and decision once taken can't be reversed.

You don't need to worry even if you can't claim ITC on buses it is not wasted you can claim depreciation on same (i.e. GST amount) in your income tax return and save some income tax.

Yes, i am completely agree with Mr Naman.

Now, it is not possible for him to avail ITC for the financial year 2017-18 on buses purchased (when he is paying 5% GST)

Hi,

- No you can not avail ITC on buses if you have opted GST@5% without ITC. ITC paid on the purchase of buses will be capitalised as cost of the buses. To claim ITC, you need to pay either 12% or 18% GST.

- According to me if you go with the ITC option then you need to pay GST @18%. HSN code is 996422. This is for transportation of passengers.

- As you are a registered GTA, collect GST @12% with ITC option.

Thanks

Hi,

Its not possible to claim ITC for FY 2017-18 now.

Yes for claiming ITC ,he should opt for 12/18% GST with itc.

Hope it helps