Input Tax Credit: Complete Guide#
What is ITC?#
Input Tax Credit allows businesses to reduce tax paid on inputs from tax liability on outputs.
Eligibility for ITC#
- Registered taxpayer
- Tax paid on purchases
- Taxable supplies made
- Tax invoice available
ITC Sources#
- Purchase of goods
- Purchase of services
- Import of goods
- Import of services
##ITC Distribution
- Within 20th of next month
- Cannot exceed output liability
Conclusion#
Proper ITC management reduces overall tax burden.