GST Input Tax Credit (ITC) – Explained with Examples
Input Tax Credit means claiming the credit of the GST paid on purchase of Goods and Services which are used for the furtherance of business. The Mechanism of Input Tax Credit is the backbone of GST and is one of the most important reasons for the introduction of GST.
As GST is a single tax levied across India (right from manufacture of goods/ services till it reaches the end customer), the chain does not get broken and everybody is able to take benefit of the same and there is seamless flow of credit.
Mechanism of Input Tax Credit
The Mechanism of Input Tax Credit can be claimed with the help of the following example:-
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