Input Tax Credit (ITC)

The credit a business can claim for GST paid on purchases, set off against GST collected on sales.

Input Tax Credit lets a registered business reduce the GST it owes on sales by the GST it has already paid on business purchases. This avoids tax-on-tax and is central to how GST works.

To claim ITC you generally need a valid tax invoice, the goods or services must be received, the supplier must have paid the tax and filed their return, and the purchase must be for business use.

• ITC = GST paid on inputs that offsets GST on outputs.
• Requires a valid invoice and the supplier's compliance (reflected in GSTR-2B).
• Blocked on certain items (e.g. personal use, specific goods/services).