GST Law
Input Tax Credit (ITC)
A credit businesses can claim for the GST already paid on their purchases, which is set off against the GST they collect on their own sales.
ITC is central to how GST avoids a cascading tax-on-tax effect — a business only ends up paying GST on the value it actually adds, by claiming credit for the tax already paid at earlier stages of the supply chain.
Claiming ITC correctly requires proper documentation and compliance by both the buyer and the supplier, and mismatches or non-compliance by a supplier can sometimes affect the buyer's ability to claim the credit.
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