| Question And Answer | |
|---|---|
| Subject: | ITC REVERSE RATE DIFFERENCE |
| Category: | GST |
| Querist: | kollipara sundaraiah |
| Answered by: | Law Intern |
| Tags: | ITC reversal |
| Date: | October 13, 2025 |
Sir,
A gst registered medicines retail dealer tax rate 12 percent tax rate decrease 5 percentage from 22-09-25
Question;
Dealer tax rate difference benefits itc reverse compulsory.
A gst registered medicines retail dealer tax rate 12 percent tax rate decrease 5 percentage from 22-09-25
Question;
Dealer tax rate difference benefits itc reverse compulsory.
In my view, ITC reversal is not compulsory solely due to the tax rate difference (12% to 5%) because the supply is not “exempt.” ITC reversal u/s 18(4) of the CGST Act & Rule 44 is triggered only when outward supplies become wholly exempt or the taxpayer switches to the composition scheme.
Since medicines at 5% are still taxable, previously availed ITC on inputs remains eligible for set-off against your new output liability (at 5%). No reversal under Section 18(4) is required.
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