Input tax credit

This query is : Resolved

ARITRA CHAKRABORTY (Querist)
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10 November 2017 Dear Sir,

I don't have a clear idea about Input Tax Credit.. I am Willing to know what is Input Tax Credit all about?

Rajannaidu

Rajannaidu (Expert)
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11 November 2017 For instance
Your tax payable on output goods or service say ---- Rs 100

For making your final goods or service, you might be purchased certain inputs on which you have paid TAX (GST) say Rs. 36

While paying your out tax of Rs.100, you can claim Rs.36 as input tax credit which is availed through your purchase , Balance you have to deposit to Tax account. i.e. Rs.100 minus Rs. 36 = deposit Rs. 64

The tax paid on purchase which is utilized for the payment of output tax is called INPUT TAX CREDIT

Hope you understand the concept.