What is Input Tax Credit Under GST? How does Input Tax Credit Mechanism work?
- Blog|GST & Customs|
- 1180 Views
- 2 Min Read
- By Taxmann
- Last Updated on 17 June, 2022
GST Input Tax Credit:
Definitions What are inputs for a Business?
The inputs for a business can be divided into three parts:
GST Input Tax Credit provides complete guidance on Input Tax Credit, Refund of Input Tax Credit & Export issues relating to Input Tax Credit. It also incorporates various issues related to Input Tax Credit such as availment, reversal, refund, etc.
2.1 Input Services:
Input Services are services which are used or intended to be used in the course or furtherance of business. CGST Act has given a very broad based definition for Input Service. Any service used in the course or furtherance of business, would be classified as Input Service.
2.2 Capital Goods:
The definition of Capital Goods is very broad and contains only two conditions which are as follows:
- Capital Goods are goods which have been capitalized in the books of account of the person claiming the credit.
- Capital goods are goods which are used or intended to be used in the course or furtherance of business.
2.3 Input Goods:
Input means any goods other than capital goods and which are used or intended to be used in the course or furtherance of business. It is again a very broad based definition and any goods used in the course of furtherance of business, would be classified as Inputs.
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