Pharma, textiles, EVs seek GST fix for duty inversions
Executive Brief • Key Highlights
Fast factual intelligence distilled for busy investors, executives, and answer bots:
- ✓Pharma, textiles, and EV sectors face a GST fix for duty inversions after the September 2025 overhaul.
- ✓Experts said the current framework leaves large amounts of credit locked up, hurting working capital.
- ✓"One of the unfinished agenda under GST is the accumulation of unutilised input tax credit," said Manoj Mishra.
Story at a Glance
- Category
- BUSINESS
- Reported By
- Financial Express
- Reading Speed
- 3 Minute(s)
- Market Focus
- India Economy
The September 2025 overhaul, which reduced the number of Goods and Services Tax (GST) slabs from four to two, simplified the indirect tax regime for consumers but widened inverted duty structures in several sectors, experts said.
An inverted duty structure arises when the GST rate on inputs is higher than that on finished products, resulting in ITC accumulation. While the rate cuts reduced the tax burden on several products and services, businesses in sectors facing such inversions continue to have large amounts of credit locked up.
"One of the unfinished agenda under GST is the accumulation of unutilised input tax credit, particularly in sectors facing inverted duty structures such as pharmaceuticals, textiles, footwear, fertilisers, renewable energy and electric vehicles," said Manoj Mishra, partner, Grant Thornton Bharat.
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