Input Tax Credit - ITC
INPUT TAX CREDIT When we purchase goods we pay Input GST to dealer and when we sell the same then we collect output GST from customer. So when we pay Taxes to Tax Authorities, we deduct the one we paid during purchase this is called Input Tax credit . Means while paying tax we don't pay whole amount collected from customer but the difference between output GST(GST collected from customer while selling the goods) and Input GST (GST paid to dealer while purchasing goods), this adjustment is called Input Tax Credit. Let us understand the same with the help of following illustrations Input Tax Credit ITC Who can claim ITC ITC can be claimed by a person registered under GST only if he meets ALL the conditions mentioned below. a. The dealer should have tax invoice b. The said goods/services have been received c. Returns have been filed. d. The tax collected has been paid to the government by the supplier. e. When goods received in ins...