FAQs on the new GST rate changes

When will the new GST rates will be implemented in India?
The new GST rates created by the 56th GST Council Meeting will be implemented on 22 September, 2025 for most goods and services.

What are the changes made in the tax slabs as per the new GST reform?
From September 22, there will be two main GST tax slabs—5% (merit rate) and 18% (standard rate) along with a separate 40% tax slab for luxury and sin goods. The earlier widely used 12% and 28% tax slabs will be slowly phased out.

Are there any changes with respect to GST filing in the 56th GST Council Meeting?
No, there were no changes made regarding GST filing. The Council focused on rate rationalization and easing compliance for GST registered businesses.

Will the new GST rates be applicable to my existing stocks?
GST is levied based on the time of supply regardless of when it's manufactured. If your existing stock is supplied after 22 September, then the new GST rates will be applied.

Which GST rate (old or new) will be applicable for goods or services that are supplied before the implementation of the new GST rates but invoiced after the implementation date?
The GST rates will be applied based on the time of supply, and in this case it is determined as follows:

• If the payment is received after the rate change, then the time of supply will be either the date of payment or the date of invoice, whichever is earlier. In this case, goods or services will be taxed at the new rates.

• If the payment is received prior to the rate change, then the time of supply will be the payment date. Here, goods or services will be taxed at the old rates.

Can I use input tax credit (ITC) on purchases made before the rate change?
Yes, ITC already taken on legitimate purchases (where tax was charged at the rate prevailing at the time of supply) remains valid. A registered business can continue to claim and utilize ITC for tax liabilities. In other words, a reduction in an output rate (from 18% to 5%) does not nullify ITC earned on earlier purchases; you can use the credit as normal.

I have gained ITC for my inward supply, but my outward supply becomes exempt as per the new GST reform. Do I have to reverse my ITC?
Yes, you will have to reverse your ITC if your supply is made on or after 22 September 2025. But if your supply is made before 22 September, you can use your ITC to reduce the tax liability.

What happens to advance payments that are received before 22 September but invoiced later?
For advance payments that are received before 22 September 2025, the old GST rates (that is, the rate in force before 22 September) will be applied for that particular portion of payment, even if the invoice is issued after 22 September. This is because the supply rule implies when the payment is received, the obligation to pay GST arises. Hence, the rates that are in force during that particular time will be applied to the advance received.

I have an invoice issued before 22 September with old rates. Now the sale is reversed. Should the credit note issued after 22 September be created with the revised rates or older rates for those items?
If you issued the original invoice before 22 September under the old GST rate, but then you reverse the sale later, then the credit note issued after 22 September must reflect the same tax rate as the original invoice—the old rate.

Do we need to cancel/reissue e-way bills for goods in transit when rates change?
No, the existing e-way bills will remain valid. There will be no need for cancellation or regeneration of e-way bills simply because GST rates have changed during transit. An e-way bill generated for the transport of goods will remain valid even if there is a change in GST rates.

FAQs for Zoho Books users

Do we need to update the Zoho Books GST configuration?
Yes, ensure the GST rate masters are updated in Zoho Books before 22 September to avoid mismatches in invoices.

How will the new GST reform affect my recurring invoices?
For recurring invoices, if a child invoice is generated on or after 22 September 2025, the new tax rates will be applied automatically.

Do I need to make any manual changes in Zoho Books to comply?
No, manual updates are not required against the items or recurring transactions. A migration banner will be posted in the app, which will help you schedule the migration. Once the migration is completed, the item masters and the further recurring transactions will be updated according to the revised tax rates.

How do I update the GST tax details in bulk for my items after 22 September?
Export and import the items with the overwrite option after making the necessary changes in the existing tax rate as of now.

Are the changes made only to tax rates as per the new GST 2.0 reforms, or were there changes in the HSN/SAC code of items as well?
There are a few goods and services like UHT milk, packaged paneer, electric vehicles, natural gas, yarns, and hotel accommodations for which HSN/SAC codes have also been revised along with the GST tax rate. Customers must update them in Zoho Books for entries created after 22 September.

Is there any option in Zoho Books that can be enabled to automatically restrict my users from applying 12% and 28% GST rates to transactions after 22 September, as the rates are depreciated?
Applying the 12% and 28% rates for transactions dated on or after 22 September 2025 is restricted by default. If you need to associate these rates with any of the transactions, you can reach out to Zoho Books' support team.

For bills that were created before 22 September but whose transaction posting date is in October/November, which rates will be considered in the books?
For bills that were created before 22 September, the old GST rates will be considered in the books, regardless of when you post them.


If you are looking for more clarity regarding the new GST rates and other decisions made in the recent GST Council Meeting, explore our article "The next generation of GST reforms."