Legal & Compliance for Business
A wrong rate on an invoice is a small error that becomes a large one by the quarter-end
On 22 September 2025, India's GST moved to two main rates, 5% and 18%, with a 40% rate for a short list of goods. Many items changed rate, a few for the worse. Since then, notifications have been amended further. Billing software, price lists and old habits do not update themselves. This session explains what changed in general terms and gives a practical method for checking your own items, invoices and records. It does not list every rate, and it is not tax advice.
Explore this page6 sections
Your software knows the rate you typed in. Not the rate that applies today.
A reduction in rate means customers expect lower prices, and a wrong higher rate means you have collected tax you may not be entitled to. A wrong lower rate means you owe the difference. Either way, the invoice is the document everything else is built on, including your customer's input credit.
GST law changes often, and rates for particular items turn on detailed entries in notifications. This session is general information for awareness. It is not legal advice, and it does not replace a qualified lawyer, company secretary or chartered accountant, who should be consulted about a specific situation.
What the session covers
35 topics across 7 areas. Seven parts, from what changed to what to check. 6 apply to almost any business; the rest only in a particular case.
What Changed, in General TermsThe outline, not the item list.5
- The GST Council met on 3 September 2025 and recommended simplifying the four main slabs of 5%, 12%, 18% and 28% into two main rates, 5% and 18%, plus a 40% rate for a short list of goods and services
- The changes took effect on 22 September 2025, except for tobacco products and pan masala, which were treated on a different timetable
- Many everyday items moved to a lower rate; individual life and health insurance policies were reported as exempt
- The Council also recommended provisional refunds in cases of inverted duty
- This is a summary of public reports of the Council's decisions. The binding rate for any item is in the rate notification
It Did Not Stop in September 2025Do not assume the last check is the current rate.4
- Notification entries have been amended since, for example reports of amendments in 2026 aligning entries with the Finance Act, 2026
- A GST Council meeting was reported as scheduled for early October 2026; anything decided there is not covered here
- The CBIC's rates page directs users to taxinformation.cbic.gov.in for current rates
- Set a regular date to re-check your own items, for instance each quarter
Always read the current notification entry for your item. Ask your accountant to confirm.
Checking Your Items and ServicesThe rate follows the item, not the shop.5
- List what you sell, with each item's classification code: HSN for goods, SAC for services
- Find the entry for each in the current notification, not in a general rate chart
- Note any condition attached to the entry, such as a description, a value or a use
- Look at bundles and combined supplies, which can attract their own treatment
- Mark items where you are unsure and take them to your accountant
Checking Invoices, Software and TemplatesWhere the old rate usually survives.6
- The rate master in your billing or accounting software
- Point-of-sale machines and mobile billing apps, which may update separately
- Invoice templates with a rate typed in
- Quotations and standing orders written at the old rate
- Invoices dated around 22 September 2025 and the supply date they relate to
- Credit and debit notes against invoices raised at an older rate
Dates, Advances and Old StockIf it appliesWhere the answer depends on facts.5
- Which rate applies depends on when the supply is treated as made, which the GST law decides by rules on time of supply
- Advances received before the change for supplies made after it
- Stock bought at the old rate and sold at the new one
- Input credit when the rate on inputs and outputs differ
- Compensation cess on older stock; the Council's decisions left open questions on this
These are questions to ask, not answers. Each needs your accountant and your facts.
Prices, Labels and CustomersThe rate change reaches the shelf.5
- Price lists, quotations, menus and online listings
- Labels and packaging that carry a printed price
- Section 171 of the CGST Act says that a reduction in the rate of tax, or the benefit of input credit, must be passed on to the recipient by a commensurate reduction in price; ask your accountant what this means for you
- Explaining changes to customers plainly
- Not describing prices as GST-inclusive or GST-free unless true
Purchases, Returns and RecordsThe other half of the books.5
- Checking suppliers' invoices carry the right rate, since an error can affect your input credit
- Reconciling purchases to your GSTR-2B monthly
- Reflecting the correct rate in returns, and correcting errors through the proper route
- Keeping a dated note of when each rate was applied and why
- A calendar of when you re-check rates
Questions to ask your accountant
- Which of my items changed rate, and from when?
- Is my billing software on the right rates for all of them?
- How do I treat advances, returns and old stock?
- Do I owe or am I owed anything for invoices at the wrong rate?
- What does the price-reduction rule mean for my products?
- When should I next re-check?
What this session is not
- Not a list of GST rates, which is on the official site
- Not tax advice about any item or transaction
- Not a statement of how any dispute will be decided
- Not a software recommendation
- Not a substitute for your chartered accountant
How the session runs
Led by a facilitator, with a qualified chartered accountant or GST practitioner where the topic needs one. It works from made-up invoices, clearly labelled, showing common mistakes such as an old rate in a template or an advance taken before the change. Participants list their own items and software, and mark what to verify. The facilitator shows where the current rate notifications and rate finder sit on the official site and asks participants to check there, because entries can be amended again.
What your students leave with
- A plain account of what changed on 22 September 2025, and what did not
- A method for checking the GST rate on each item or service they sell
- A checklist for billing software, invoice templates and price lists
- Awareness of where timing, advances and old stock can raise questions
- The questions to ask a chartered accountant about their own business
- Where to find the current rates on the official site
Scheduled sessions
Nothing scheduled yet
Sessions are arranged with a college once a date is agreed. Ask us and we will find the right person for it.
A student rather than a college? See what is coming up, or ask your placement team to host this.
The rate on your invoice is what your customer, and the tax department, will read first.
Tell us who your students are and what stage they are at. Sessions are free for participants.