Question: What is the input tax credit (ITC) in GST?
Options:
Tax paid on inputs
Tax paid on outputs
Tax refund
None of the above
Correct Answer: Tax paid on inputs
Solution:
Input tax credit (ITC) refers to the tax paid on inputs that can be claimed back against the output tax liability.
What is the input tax credit (ITC) in GST?
Practice Questions
Q1
What is the input tax credit (ITC) in GST?
Tax paid on inputs
Tax paid on outputs
Tax refund
None of the above
Questions & Step-by-Step Solutions
What is the input tax credit (ITC) in GST?
Step 1: Understand that GST stands for Goods and Services Tax, which is a tax on the supply of goods and services.
Step 2: Know that when a business buys goods or services, it pays a tax on those purchases. This is called input tax.
Step 3: Realize that businesses also charge tax when they sell their goods or services. This is called output tax.
Step 4: Input tax credit (ITC) allows businesses to reduce the amount of output tax they need to pay by the amount of input tax they have already paid.
Step 5: For example, if a business pays $10 in input tax and charges $15 in output tax, it can claim back the $10, so it only needs to pay $5 in tax.
No concepts available.
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