Input Tax Credit
Credit for GST paid on inputs, available to be set off against GST payable on outputs.
In Simple Terms
A business gets to subtract the GST it already paid on its purchases from the GST it owes on its sales.
Detailed Legal Meaning
Input tax credit allows a registered person to reduce the GST payable on outward supplies by the GST already paid on inward supplies used in the course or furtherance of business, subject to specified conditions and documentary requirements, and is central to GST's design as a value-added tax.
Relevant Acts & Sections
- Central Goods and Services Tax Act, 2017Search on India Code ↗