On 22 September 2025, India made the biggest change to GST rates since GST launched in 2017. The earlier four-slab structure was simplified into two main rates, 5% and 18%, plus a special 40% rate for luxury and sin goods. Most items taxed at 12% moved to 5%, and most items at 28% moved to 18%.
A year on, most businesses have adjusted. Our reviews still regularly find errors that lead to notices, lost input tax credit or wrong pricing. Here is a practical checklist.
1. Check your item and service master Make sure every product and service in your billing software is mapped to the correct HSN/SAC code and the current rate. Old rates left in the software are the most common error we see.
2. Review input tax credit (ITC) When your output rate fell but your inputs are still taxed at a higher rate, credit can build up in your ledger. Check whether you qualify for a refund under the inverted duty structure, and file it on time.
3. Reconcile for the annual return FY 2025-26 had old rates before 22 September 2025 and new rates after. When preparing GSTR-9 and GSTR-9C, reconcile the two periods separately against your books and GSTR-1/GSTR-3B.
4. Pass on the benefit of rate cuts Where rates came down, customers expect lower prices. Keep records showing how price changes were worked out, in case your pricing is ever questioned.
5. Update contracts and quotations Long-term contracts, rate cards and quotations drafted before the change may still mention old rates. Make sure GST is stated as “applicable GST”, not as a fixed percentage.
6. Train your team Billing and accounts staff should know the current rates and the correct treatment for credit notes and returns involving goods sold before the change.
How KKKD & Co. can help
We offer GST health checks: a review of your rates, ITC, returns and refunds to catch problems before they become notices. Get in touch to schedule a review.
This article is for general information only and is not professional advice. Please consult a qualified Chartered Accountant for your specific situation.
Notes:
- Both titles are short enough to fit on the cards without being cut off with “…”.
- Both are set to today with different times, so the Income-tax article (11:00) shows first and the GST article (10:00) second. Both will sit above “GST Refund Delays”.
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