TaxTMI 
TaxTMI 
In cases where goods held as stock-in-trade subsequently fall outside the purview of Compensation Cess, would there be a requirement for reversal of input tax credit under section 18(4) of the CGST Act? Raising this question to ignite the discussion among the learned professional friends.
Will there be 18(4) reversal on stock in hand for items going outside the purview of Cess?
22 Sep 2025 
11 Replies 
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Compensation cess credit treatment: cess ITC may require reversal when cess is removed; GST ITC remains utilisable.
Removal of Compensation Cess does not trigger reversal of CGST/SGST/IGST input tax credit on stock-in-hand because underlying GST remains payable; however, any input tax credit specifically attributable to Compensation Cess becomes unutilisable when cess liability ceases and must be reversed or refunded under applicable cess-specific rules and refund mechanisms, subject to competing interpretations and administrative clarification. (AI Summary)
Removal of Compensation Cess does not trigger reversal of CGST/SGST/IGST input tax credit on stock-in-hand because underlying GST remains payable; however, any input tax credit specifically attributable to Compensation Cess becomes unutilisable when cess liability ceases and must be reversed or refunded under applicable cess-specific rules and refund mechanisms, subject to competing interpretations and administrative clarification. (AI Summary)