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Input tax after revision of GST rate

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Somnath

Job

95 Points Posted on 04 September 2025

Dear all

GST rates are reduced in various products after 56 GST council meeting.

In several cases , GST rates are reduced related to our GST paid closing stocks , which are already reflected in 2B purchase.

From 22nd September onwards, we have to bill these materials @ revised lower GST rates.

I am warried regarding material wise input tax adjustment for these cases , where GST rates reduced of high rated tax paid products.

It is not yet cleared , wheather Input adjustment will be allowed or not in case of those materials, who's GST rates became 0 or reduced from input tax paid % ?

I came to know that excess amount of input tax will be reversed & added with purchase cost for those closing stocks , which will sell at 0 GST or lower % of GST rates compare to input tax rates

Plz reply with updated reference

Regards

S Mallick

Replies (1)

Rama chary Rachakonda

Master in Accounts & high court Advocate

7021 Points Posted on 05 September 2025

For goods where the GST rate has been reduced (including cases where the rate becomes 0%), the excess input tax credit availed on such goods needs to be reversed. This reversal is typically done by adding the excess amount to the purchase cost of those closing stocks when they are sold at the new lower GST rate or 0% GST.

You should refer to Section 17(2)of the CGST Act and Rule 44 of the CGST Rules for specifics on how to handle input tax credit adjustments when GST rates change..