Claiming ITC on Outstation Hotel Stays & Business Travel: Section 12 Rules
Claiming ITC on Outstation Hotel Stays & Business Travel: Section 12 Rules
Legal & accounting guide for business travelers and accountants on place of supply rules under Section 12(3) IGST Act, cross-state CGST/SGST restrictions, and Tally accounting.
Who is this for: GST Travel Rules
Quick Answer: Can You Claim ITC on Outstation Hotel Stays & Travel?
ITC is NOT claimable on outstation hotel stays outside your state of GST registration because hotels charge local CGST/SGST where the property is located (Place of Supply = Hotel Location per Section 12(3)). Hotel ITC is ONLY claimable when the hotel stay occurs within your home state of GST registration.
- Section 12(3)(a) IGST Act fixes place of supply as the location of the immovable property.
- Outstation hotel CGST/SGST cannot be set off against home state tax liabilities.
- Flight ticket ITC is claimable if booked under corporate GSTIN with IGST or home state tax.
- TallyPrime books outstation hotel taxes as non-creditable travel expense line items.
1. Place of Supply Rules Matrix for Business Travel
| Travel Expense Type | Place of Supply Rule | Tax Type Charged | ITC Eligibility |
|---|---|---|---|
| Same-State Hotel Stay | Hotel Location (Home State) | Home CGST + SGST | ELIGIBLE |
| Outstation Hotel Stay | Hotel Location (Other State) | Other State CGST + SGST | BLOCKED / EXPENSED |
| Air Travel Tickets | Location of Recipient (Section 12(9)) | IGST or Home CGST + SGST | ELIGIBLE |
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