Question

What is Input Tax Credit (ITC)?

Options

• The total GST included in the final invoice paid by the consumer

• The GST deposited with the government on inter-state sales

• The credit a registered dealer can claim for GST paid on purchases used in the course of business

• The tax charged by the manufacturer on the first taxable value in the trading chain

Answer 1

Input Tax Credit (ITC) is defined as the credit a registered dealer can claim for GST paid on purchases used in the course of business. It is subtracted from the output GST to get the net GST payable.