Traders may keep ITC on old stocks in GST revamp

As India prepares to move towards GST 2.0, the government is expected to allow businesses to carry forward accumulated input tax credit (ITC) on existing inventories to prevent companies from losing credit on goods purchased at higher rates.

- MONIKA YADAV

The GST Council is also likely to update the tax administration system to ensure a smooth transition and shield businesses from additional costs.

"As we move towards the GST overhaul, our objective is to ensure a seamless transition for businesses. Allowing the carry forward of accumulated ITC on existing inventory will safeguard companies from any tax disadvantage arising due to rate rationalisation. The updated IT systems will ensure smooth credit transfer and prevent additional costs for taxpayers," a government official familiar with the matter said.