Commodity and Services Tax Council meeting: The Ministry of Finance issues the common questions about the new price structure, the date of implementation

The government of India has launched comprehensive reforms under the “GST from the next generation” initiative, designed to reduce the burden on small companies and reduce taxes on daily necessities.

Finance Minister Nermalla Sitramman announced that the four-based GST structure has been simplified to two basic-5 % and 18 %-with a 40 % special plate for sin commodities such as tobacco and selecting luxury elements.

To address common concerns, the Ministry of Finance has released the following common questions on new commodity tax rates and services:

1. When will changes in commodity and services tax rates enter into force?

According to the recommendations of the Commodity and Services Tax Council at its fifty -sixth meeting, the changes in the rates of commodity and services tax on services and goods other than cigarettes, tobacco chewing such as Zarda, unpopular tobacco, and beedi will be effective from September 22, 2025. CESS will continue to apply. The new prices will be implemented later, once all loans and interest obligations are emptied under the Cess CESS account.

2. Is there any change in the registration threshold required for goods under CGST law, 2017?

No, there is no change in the registration threshold under CGST, 2017.

3. What is the notice that stipulates the revised prices?

Separate commodity tax rates and services will be notified. The notifications will be placed on the CBIC site.

4. What happens if goods/services are provided before the price is changed, but the bills issued later?

According to Article 14 (A) (i) of the CGST Law, 2017:

If the payment is received after changing the interest rate → The time of the offer is a matter of receipt or bill earlier.

If the payment is received before changing the price → The time of the offer is the payment date.

5. What if the progress is received, but the offer or the bill is not completed?

The commodity and services tax rate will be determined according to the time of the exhibition rules in section 14 of the CGST Law.

6. What about ITC on the purchases made before changing the rate?

Article 16 (1) of the CGST law authorizes the registered persons to demand ITC to the internal supplies of the prevailing rate at the time of presentation, taking into account the conditions and restrictions.

7. What will the impact on IGST for imports?

IGST will be applied to imports according to the rates of goods tax and revised services, unless they are exempted separately.

8. If my external supply rate is reduced, but I really carry ITC at a higher rate, can I still use it?

Yes. Once credit, ITC can be used for any responsibility to remove as in Section 49 (4) of the CGST law.

9. If my offer becomes exempt under the new prices, I am carrying ITC, do I need the opposite?

ITC can be used until September 21, 2025. From September 22, 2025, it is necessary to reflect under the provisions of the CGST law.

10. Is it possible to claim the accumulated ITC recovery of the inverted duty structure before price changes?

no. As shown in Circular No. 135/05/2020-GST (in its modified form), the reply is not allowed when the inputs and outputs are the same elements that are subject to tax at different times, even at different rates.