Tell regarding ITC

Question

Tell regarding ITC

Accepted Answer

Input Tax Credit (ITC) is a mechanism to avoid double taxation on goods and services.

ITC allows businesses to claim credit for taxes paid on inputs used in the production of goods or services.
It helps in reducing the overall tax liability of businesses.
ITC is available for taxes paid on inputs such as raw materials, services, capital goods, etc.
Example: If a manufacturer pays GST on raw materials, they can claim ITC to offset the tax liability on the final product.
ITC is an important feature of the GST system to promote seamless flow of credit and avoid cascading of taxes.

Accepted Answer

The buyer must pay towards the supply of goods and/or services within 180 days from the invoice date. If they fail to, then the ITC already claimed will need to be paid to the government, along with interest payable under Section 50.* The ITC claim can be again made once the payment is made to the supplier.

Tell regarding ITC

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