Input Tax credit – Backbone of GST

Goods and service tax aims at providing seamless flow of credit throughout supply chain. Input Tax Credit is the backbone of goods and service tax.  The term input tax has been defined under section 2 (62) of CGST Act 2017. The term Input Tax in relation to registered person means Central tax, state tax, integrated tax, union territory tax charged on any supply of goods or services or both made to him and includes IGST on import of goods and tax payable on reverse charge basis under CGST SGST IGST UTGST Act. This definition specifically excludes tax paid under composition levy to be called as input tax. Further, the section 2 (63) of CGST Act defines Input Tax Credit. It means credit of tax.

Source Taxguru

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