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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Here is the difference between LR, CN, and E way bill. LR is an lorry receipt, which you get once you upload your goods in the lorry/truck. This is an receipt acknowledgement from the transporter. CN is a Consignment note which is similar to the lorry receipt. Consignment note is a note which any transporter/courier company generates to take your material to the recipient. E way bill is an electronic document shall be carried by transporter of goods in addition with consignment note/LR. E way bill is a requirement of government to safeguard the revenue and to avoid tax evasion. With the help of e way bill the government ensures that no material is carried without making proper invoice and evading taxes. Learn more updates on E way bill at GST Latest News and updates as on today !

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