Delhi HC directs Govt. to examine anomalies arising from mandate of registration in every State & Union Territory to avail Input Tax Credit (ITC) in case of inter-state supplies of goods / services; As per the petitioner who is engaged in business of booking tours & hotel packages for customers, it cannot avail ITC of SGST paid to hotels in another State absent any registration, which is contrary to the purpose and objective of GST; This results in effective rate of service tax going up from 18% to 27% for hotel rooms in Rs. 2,500/- to Rs. 7,500/- per night slab and from 28% to 42% for hotel rooms above Rs. 7,500/- per night tariff; HC directs Revenue to consider whether matter should be placed before GST Council, while listing the matter on February 8, 2018.
Citation: [TS-385-HC-2017(DEL)-NT]