what do we mean by ITC? please explain in detail of sales and purchase on ITC ? whether it is applicable on RCM
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Quick Summary
This discussion explains Input Tax Credit (ITC), a crucial concept for registered businesses. It details how ITC works for both purchases and sales, including its role in calculating tax liability. The thread also touches upon its applicability under the Reverse Charge Mechanism (RCM) and references relevant sections of the CGST Act.
When you are a registered person purchased taxable goods or services from a registered dealer and what amount of tax was paid on that goods or services and claim it is known as itc. On sales of goods or services is liable to pay taxes to the govt. by a registered dealer.
Input Tax credit is available for purchase of inputs by a registered dealer (regular assesse) in the course of supply of goods and services as mentioned in detail in Sec 2 (62). In respect of of integrated goods and services tax charged on import of goods. tax payable under the provisions of section 3 and 4 of Sec 9 under reverse charge of cgst. the tax payable under the provisions of Sec 3 and 4 of Sec 5 of igst act. . But does include tax under composition levy.