which provision/notification states the reversal of ITC on stock held in case of reduction of rate of tax by the time of supply
can anybody have a light on this?
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Reversal of ITC in case of reduction of rate of tax
Replies (3)
Sir, reversal is required only if GST becomes exempted for the product. In case of reduction in rate (e.g. 18% to 12%), no ITC is reversal is required.
However, recent clarifications have been given that refund under inverted tax structure will not be provided in the above cases. This does not mean ITC has to be reversed, it just means that refund cannot be claimed. ITC already claimed can be continued with. These clarifications themselves are without any legal basis.
Hope this clarifies.
Thank you Sir for your clarification.
My inputs after reading the Law:
ITC in Stock value need not be reversed but it has to be passed on to the customer a commensurate reduction in the sale price otherwise it amounts to profiteering under GST as per section 171 of CGST Act, 2017.
My inputs after reading the Law:
ITC in Stock value need not be reversed but it has to be passed on to the customer a commensurate reduction in the sale price otherwise it amounts to profiteering under GST as per section 171 of CGST Act, 2017.
Agreed - compliance with antiprofiteering law is mandatory.
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