Question ID : 21452

RCM ITC In case of Restaurant Opted to Pay 5% on Restaurant Supply

A registered person runs a restaurant and a guesthouse on the same premises. The restaurant pays GST at 5% without ITC. Rent of ?60,000 is paid for both under a single bill, with GST under RCM at 18% (?10,800). In this case, which option is more suitable for claiming ITC for the guesthouse portion?

Option 1: Based on the ratio of outward supply.

Option 2: Specify separate rent for the guesthouse and restaurant in the rent agreement, obtain two invoices, and claim ITC of GST paid under RCM for the guesthouse rent.

Suggestions are welcome!

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