ITC accumulation on account of higher GST rate on supplies recived rather than reduced gst rate levied on supplies manufactured by us

[Navid Mukadam]

Esteemed Experts

I am inquiring about the fact that we are in the supply of veterinary products, and the GST rate on supplies has been reduced from 12% to 5%. This has resulted in a reduction in our liability, which can be offset by the ITC that is available in our ledger and currency. payment

However, the accumulation of ITC in the electronic ledger will be influenced by the 18% GST on supplies received from the vendor.

Therefore, the appropriate course of action for this ITC is to determine whether it should be reversed or refunded.? 

please provide a detailed view

AI Summary

Inverted duty structure: accumulated input tax credit from higher rate inputs may be claimed as refund under GST refund provisions.
Accumulated input tax credit from higher rated inputs against lower rated output supplies constitutes an inverted duty structure. Such ITC, correctly availed and used for business, generally does not require reversal and may be refunded under the statutory refund mechanism applicable to inverted duty scenarios; procedural guidance and administrative circulars support refund eligibility where the supplies are not in a restricted category.