GST rate change from 12% to 5%. What should be done post 22nd Sept

[Sreenath]

Hi

The product that I sell falls under 12% with the rate revision it will be 5% after 22nd Sept. At what rate should I bill my customer for the exisring stock in hand happening after 22nd Sept.

Please clarify

[Sadanand Bulbule]

Effectively you have to charge reduced rate of tax @ 5% as per the fresh Notification prevailing as on the date of invoicing.

[Sreenath]

Okay.in this case I will lose in less ITC credit. How do I hear this loss? Please clarify 

[Sadanand Bulbule]

You can pay GST dues using the entire ITC claims even after the new tax rates are rolled out from September 22. So you are not incurring any loss.

[Shilpi Jain]

Credit of GST will not be lost. You can claim the 12% GST on your inwards (assuming you are a trader), even though you pay only 5% GST.

[Shilpi Jain]

In case you cannot use this excess ITC (12-5%) you can consider applying for refund. THe FAQ given in this regard is not in line with the law. 

[KASTURI SETHI]

I support the views of both experts at serial nos.1,2 & 3 above. Regarding the refund claim, litigation is dead certain.

AI Summary

GST rate reduction requires billing at the new lower rate on post-change supplies and permits using pre-change input tax credit. Supplies invoiced after the statutory GST rate change must be billed at the new lower rate on the date of invoicing, while input tax credit attributable to earlier higher-rate purchases remains available to offset current GST liabilities; excess unutilised credit may be claimed as a refund, subject to potential administrative inconsistency and litigation risk.