Input Tax Credit (ITC) Under GST: A Complete Guide

Input Tax Credit (ITC) Under GST: A Complete Guide

Blog Article

The Input Tax Credit (ITC) Under GST is a crucial mechanism that allows businesses to claim credit for the tax paid on purchases and adjust it against their GST liability. This ensures that tax is levied only on the value addition, eliminating the cascading effect of taxation. ITC plays a vital role in reducing the overall tax burden on businesses, improving cash flow, and promoting compliance. However, claiming ITC requires adherence to specific conditions, such as maintaining valid invoices and ensuring that suppliers have filed their GST returns. Understanding ITC rules helps businesses optimize tax benefits effectively.