Change in GST rate under GST reform wef 22.09.25

[mk Jain]

Dear Sir/Mam,

In new rate of GST  input of product is under 5%(20%) and 18%(80%) and my output is also 5%(50%) and 18%(50%). But volume is different.

In this case input is more than output and ITC will accumulate. Can we get refund of ITC under inverted duty structure as input of one of my product is 18% and output is 5% out of of 4-5 products and volume of this product is 50%.

MK

[Sadanand Bulbule]

Such and other transitional issues due to GST-02 are in the active consideration by the GoI/CBIC. Better to wait for the proper clarificatioon and FAQs.

However the scheme of IDS has been simplified by way of 90% refund within 7 days. Modalities have to be worked out in this regard.

[Sadanand Bulbule]

Simplified IDS Scheme shall be operationalized from 1st November, 2025.

[Shilpi Jain]

Refund would be eligible since rate of tax on your inputs is higher than on your output.

[mk Jain]

Thanks to all for valuable input. I think we should wait for better clarity.

AI Summary

Inverted duty structure: simplified refund mechanism for accumulated input tax credit under GST reform, operational soon. Change in GST rates effective 22.09.25 led to ITC accumulation where inputs taxed at higher rates than outputs. The query concerns refund eligibility under the inverted duty structure for mixed-rate inputs and outputs with differing volumes. Respondents indicated transitional GST-02 matters and FAQs are pending, and that a simplified refund mechanism will allow expedited recovery of the bulk of eligible ITC once procedural modalities are finalised and the scheme is operationalised.