<h1>GST circular shields suppliers from ITC reversal; distributors face excess unusable ITC, Section 15 amendment may help</h1> A government GST circular clarified that financial/commercial credit notes issued without GST do not require recipients to reverse input tax credit (ITC), protecting suppliers but leaving distributors with potentially unusable excess ITC and cash-flow strain. Experts note no current refund mechanism for accumulated ITC and say a proposed amendment to Section 15-allowing GST credit notes without pre-sale invoice linkage-should relieve blockage once notified, but only after a transition period. The distributors' trade body has sought urgent CBIC guidance on ITC treatment following recent 5%/18% rate rationalisation and flagged rate anomalies in detergents that may hinder consumer benefits and complicate audits.