05 January 2015
please explain the concept of input tax credit in general in simple words.. I have read about it in technical words but I'm not fully clear about it.. Please help by explaining in simple words.. Thankyou.
06 January 2015
Input Tax credit means taking tax credit which are paid at the time of purchase and claimed at the time of selling of product or services. For example. 10 kg of Raw material is purchased at Rs. 10,400/- in this amount Rs. 400/- is included as input tax (VAT). Further the same item is sold at Rs. 15,000/- after some processing. And as per state VAT laws VAT required to be charged at 10% (assume) then tax liability at the same sale will be Rs.1500/-(15000x10%) However if we are eligible for Input Vat Credit then in that case we need to pay only Rs. 1,100/- (1,500-400).
Hopes after this you will some basic understanding of Input Tax Credit
14 January 2015
input mean: you are buyer and buy some goods for resale and you register under the act. like 100+4= 104 and selling price is 110 +4% = 114.40 and you have to pay only 4.4-4= 0.40 .
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