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What is Input Tax Credit
What is Input Tax Credit. Can anyone tell me what is the definition of ITC and explain ITC
Replies (8)
Quick Summary
Credit on cgst, sgst, IGST paid on your purchases is input tax credit
I want more explanation
I suggest you search articles on the subject. Detailed explanation not possible on forum. Or you can read extracts of the law.
Section 16-18 of cgst act will help you understand the concepts
Section 16-18 of cgst act will help you understand the concepts
Ok tnx
Refer section 2(62) and 2(63).
Ok tnx
ITC is the tax that a business pays on a purchase and that it can use to reduce its tax liability when it makes a sale. In other words, businesses can reduce their tax liability by claiming credit to the extent of GST paid on purchases. Goods and Services Tax (GST) is an integrated tax system where every purchase by a business should be matched with a sale by another business. This makes flow of credit across an entire supply chain a seamless process.
Input tax credit as the word specifies is a benefit available to a regular dealer but not in case of a composition dealer.
It reduces the tax liability for gst paid on inputs and sets off for the same against output tax liability.
Eligibility conditions:
1.available to a regular dealer.
2. it's available to a taxable seller in case the supply made by the seller is in the course of furtherance of business.
3. cannot be adjusted in export sale.
It reduces the tax liability for gst paid on inputs and sets off for the same against output tax liability.
Eligibility conditions:
1.available to a regular dealer.
2. it's available to a taxable seller in case the supply made by the seller is in the course of furtherance of business.
3. cannot be adjusted in export sale.
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