GST Input Tax Credit (ITC): A Complete Guide for Businesses
ITC reduces the tax liability of the business, enhancing profitability. Through its mechanism to offset input taxes against output taxes, it only allows tax paid on value addition and promotes the transparent and compliance mechanism in taxation.Input Tax Credit stands for the credit a business can claim for the GST paid on inputs (goods or services purchased) used in the course of business. This mechanism will enable businesses to offset the tax they have paid on purchases against the tax they collect on sales, thereby preventing double taxation.