GST Implications for Department Store Vendors: Stock Exemption Analysis
The recent GST reforms effective September 22, 2025, have significant implications for department store vendors who hold goods in stock that have transitioned from taxable to exempt status. This analysis examines the Input Tax Credit (ITC) reversal requirements, compliance obligations, and practical implementation strategies based on current notifications, GST Council recommendations, and official FAQs. Executive Summary and Key Findings Department store vendors with goods in stock that have become exempt under the new GST regime face mandatory ITC reversal obligations under Section 18(4) of the CGST Act, 2017. The transition requires immediate attention to avoid penalties and ensure compliance with the revised framework effective September 22, 2025. Critical Action Required : Vendors must calculate and reverse ITC on exempt stock in their September 2025 GST returns, as the exemption triggers Section 18(4) provisions that mandate reversal when "goods or services supplied b...