Whether to file ITC 03 for downward GST rate revision - Reg.

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This discussion clarifies whether filing ITC 03 is necessary when GST rates are reduced, for example, from 12% or 18% to 5%. Experts advise that ITC 03 is not required in such cases, as it's only applicable when goods become wholly exempt from GST or when a business opts for the composition scheme. Therefore, for stock where the GST rate has simply decreased but the goods remain taxable, no ITC 03 filing is needed.

Gopalakrishnan. S

Gopalakrishnan. S (Querist)

15 November 2025 Dear Experts,

With reference to the abolition of 12% GST rate with effect from 22nd Sep of this year,
is it necessary to file ITC 03, if the rate of GST is reduced from 12% or 18% to 5%, for the stock
held as on 21.09.25 under either of this catagory.
In ITC 03, there is provision only for those goods which has been wholly exempted. So
what should be done for the stock on which GST rate has been reduced but not exempted.

Pls. advice.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

16 November 2025 No, filing ITC-03 is not required when GST rates are merely reduced (e.g., from 12% or 18% to 5%) as long as the goods remain taxable. ITC-03 is applicable only when goods become wholly exempt or when a taxpayer shifts to the composition scheme, as per Section 18(4) of the CGST Act.

Gopalakrishnan. S

Gopalakrishnan. S (Querist)

17 November 2025 Thank you very much Sir.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

17 November 2025 You are welcome.

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