Input Tax Credit (ITC)
The GST paid on purchases that a registered business can set off against the GST it owes on its own sales.
Related terms
- GSTR-2B
An auto-generated statement showing the input tax credit available to a taxpayer based on what its suppliers have reported, used as the reference point for ITC reconciliation.
- Blocked Credit (Section 17(5))
Categories of input tax credit specifically disallowed under the CGST Act, such as credit on motor vehicles for personal use or on goods lost or stolen, regardless of whether conditions are otherwise met.
- Reverse Charge Mechanism (RCM)
A GST mechanism where the recipient of specified goods or services, rather than the supplier, is liable to pay the tax directly to the government.
- Inherent Risk
The susceptibility of an assertion to misstatement before considering any related controls — some balances (estimates, related-party transactions) are inherently riskier than others.
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