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Common risk cases Invoice issued in Jan but goods delivered in Feb Goods dispatched in Jan, invoice in Feb Returns/credit notes in Feb for Jan sales MRP printed and trade margin agreements signed before the change Practical control: create a rate-change SOP for 31 Jan night: freeze old rate billing after business hours run a pending delivery report ensure invoice date aligns with actual supply rules you follow internally document basis for rate applied (audit trail) 6) What you should update immediately (checklist) Master data & billing Update SKU-wise HSN classification to match the notified groups (2401/2402/2403/2404, 2106 90 20, biris codes) Update tax rate mapping: Biris 18% Pan masala + most tobacco 40% Remove/disable Compensation Cess calculation where cess rate is now Nil Contracts & pricing Update distributor agreements for tax change clauses Refresh rate cards, schemes, and credit note policies GST return hygiene Watch for: outward tax liability differences in GSTR-1 customer mismatches (B2B buyers reconciling ITC) old HSN-rate combinations still appearing after 1 Feb 7) Simple illustration (invoice-level) Assume a taxable value of 1,00,000: If product falls under 40% GST group (most tobacco/pan masala) GST @ 40% = 40,000 Total invoice (GST only) = 1,40,000 (excluding any other non-GST levies) If product is Biris (18%) GST @ 18% = 18,000 Total invoice (GST only) = 1,18,000 (Your real consumer price may still change based on non-GST levies and pricing strategy.) 8) What to communicate to clients/stakeholders Use a one-paragraph note like this: From 1 Feb 2026, GST rates on tobacco/pan masala have been restructured: Biris are taxed at 18% GST, while pan masala and most tobacco products move to 40% GST as per the notified schedules

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