What is Input Tax credit under GST system?

Input tax credit(ITC) is one of the most important features available under Good and Service Tax. Thus, it is available as a benefit to the entire chain involved in the cycle. i.e from the starting point of manufacturer till the end consumer, who consumes it.

However, there are few conditions binding to avail input tax credit on capital goods under GST. Further, there is a list of ineligible input tax credit under GST for goods and services. There are also, few statutory conditions for claiming ITC under GST.

What is the Meaning of Input Tax Credit?

Ans. Input tax credit under GST means the central tax (CGST), State tax (SGST), or Union territory tax (UTGST) and integrated tax (IGST). This tax is chargeable on the supply of goods or services or both made to a registered person.

Further, It also includes tax paid on a reverse charge basis and IGST charged on the imported goods. However, it does not include tax paid under composition levy or scheme.

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