ITC on Food & Beverages Allowed When Supplied as Part of Event Management Services: WB AAR

ITC on Food & Beverages Allowed When Supplied as Part of Event Management Services: WB AAR

Citius Holidays Private Limited is engaged in providing event management and tourism services to corporate clients, including organising offsite meetings, conferences, training programmes and similar corporate events. The applicant arranges hotel accommodation, conference halls and food and beverages for participants. The applicant, in turn, raises a consolidated invoice on its clients for the overall event management service.

The applicant sought clarity on the eligibility of input tax credit (ITC) on food and beverage services and related invoicing aspects under the GST law.

Issue Raised: Whether ITC on food and beverage services procured as part of hotel conference/event packages is admissible under the proviso to Section 17(5)(b)(i) of the CGST Act when such services form an element of a taxable composite supply of event management,

Authority’s Decision: The Authority held that event management involves multiple naturally bundled supplies such as venue booking, accommodation, and food and beverages, supplied together in the ordinary course of business, with event management as the principal supply. Such transactions qualify as a composite supply under Section 2(30) of the CGST Act. Since food and beverages are an integral part of a taxable composite supply, the restriction under Section 17(5)(b)(i) does not apply, and ITC is admissible in terms of the proviso to that provision.

It was further held that GST law does not mandate separate invoicing for individual elements of a composite supply, and a consolidated hotel invoice is sufficient for claiming ITC, subject to Section 16 compliance. ITC was also allowed where food is billed separately and recharged with a margin, as well as where conference hall and food charges are inseparably bundled or included in consolidated hotel packages. However, the applicant’s own invoicing method to clients was held to be outside the scope of the advance ruling jurisdiction.

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