Input Tax Credit

Overview

Input Tax Credit indicates decreasing the taxes paid on inputs from taxes to be paid on output. If some supply of services or goods is supplied to a taxable individual, the GST imposed is known as Input Tax. Input Tax Credit can’t be utilized to all kinds of inputs, each state or a country can have various rules and regulations. Input Tax Credit is more feasible to a dealer who has obtained goods to resale.

.Input Tax Credit under GST – Provisions To declare ITC must be satisfied and forms one of the most significant activities for every business to resolve its tax liability. ITC is the foundation of GST and an important matter of concern for the registered persons. The conditions for eligibility to ITC and eligible ITC have been prescribed which is more or less in line with the pre-GST regime. This is majorly in order with the pre-GST management. These practices are very stringent and precise in their approach.

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Basic
- ₹ 1500
- Upto 500 Entries
  - ITC Reconcilation with 2A
  - Difference's Report
  - Party wise Report
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Premium
- ₹ 2500
- Upto 1000 Entries
  - ITC Reconcilation with 2A
  - Difference's Report
  - Party wise Report
  - Full Support and Assistance
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Ultimate
- ₹ 4500
- Upto 5000 entries
  - ITC Reconcilation with 2A
  - Difference's Report
  - Party wise Report
  - Full Support and Assistance
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Benefits

Tax credit reduces the actual tax that is owed to government

Tax credit is applied to the owed after-tax deduction have been applied

Documents Required

Invoice issued by the supplier

Invoice issued similar to Bill of Supply, in cases where the total amount is less than Rs. 200 or reverse charge mechanism is applicable

Debit note issued by the supplier (if any)

Bill of Entry or similar documents issued by the Customs Department

Bill of Supply issued by the supplier

Document issued by ISD, could be an invoice or credit note

Clear All Your Doubts !

What is Input Tax Credit?

Input Tax Credit means the credit of input tax on the supplies of goods or services or both received by a registered person.

Can GST paid on a reverse charge basis be considered as input tax?

Yes. The definition of input tax includes the tax payable under the reverse charge.

Does input tax include tax (CGST/IGST/SGST) paid on input goods, input services, and capital goods?

Yes, it includes taxes paid on input goods, input services, and capital goods. The credit of tax paid on capital goods is permitted to be availed in one installment.

Is credit of all input tax charged on the supply of goods or services allowed under GST?

A registered person is entitled to take credit of input tax charged on supply of goods or services or both to him which are used or intended to be used in the course or furtherance of business, subject to other conditions and restrictions.

Is there any restriction on the period for availing of ITC?

In cases of new registration, change from composition to normal scheme, from exempt to taxable supplies, the concerned person cannot avail ITC after the expiry of one year from the date of issue of tax invoice relating to such supply.

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