Today let us talk about Input Tax Credit Mechanism under GST
Input Tax Credit is one of the key features of GST. Input Tax Credit will help in eliminating cascading effect of taxes which are prevalent under the current regime.
When you buy raw materials as inputs to manufacture and sell your product, you pay taxes on the materials or inputs used. Hence, when you are required to pay tax on the finished goods or output, you can reduce your tax liability by claiming the credit of tax that you have already paid while buying input materials.
To claim the credit of GST paid while buying inputs, you must satisfy the following conditions:
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