Regarding balance ITC after 22nd September.

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This discussion clarifies the treatment of Input Tax Credit (ITC) when there's a reduction in the GST output rate. If a customer buys at 12% and sells at 5% after 22nd September, the remaining 7% ITC cannot be carried forward. Unused ITC accumulated due to a rate reduction must typically be reversed after 21st September 2025 and cannot be used for supplies taxed at the new lower rate.

jignesh sitapara

jignesh sitapara (Querist)
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13 September 2025 Dear Experts,
A customer buys 12% and then sells after 22 September at 5%,
so what should be done with balance ITC 7% ? Can carry forward ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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13 September 2025 Any unutilised ITC that accumulates due to reduction in output GST rate must typically be reversed after 21 September 2025. The ITC can only be used to offset output liability for supplies made up to and including 21st September. From 22nd September onwards, for supplies taxed at the lower rate, the unused ITC attributable to such stock must be reversed as per the relevant provisions of the CGST Act. It cannot be carried forward for use at the new lower rate.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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19 September 2025 Good Luck...

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