What is Inverted Tax Structure?

As the name suggests, Inverted Tax Structure is a condition where the rate of tax on inputs purchased i.e. the ‘GST Rate paid on inputs received’ is more than the rate of tax i.e. ‘GST Rate Payable on outward supplies’ on outward supplies (finished goods).

In simple terms, the GST rate paid on purchases is more than the GST rate paid on sales.

For Example: The tax on raw materials for a business is more than the tax rate on the suppli