Input Tax Credit (ITC)
Definition
The GST paid on business purchases that can be offset against GST collected on sales. Reduces your net GST liability. ITC is only available if the supplier has filed their return and the invoice is valid.
Related Terms in India GST
HSN Code
Harmonized System of Nomenclature — a 4-8 digit code classifying goods for GST purposes. Required on GST invoices based on annual turnover. HelloBooks includes a searchable HSN code database.
SAC Code
Service Accounting Code — a 6-digit code classifying services under GST (similar to HSN for goods). Required on service invoices. Example: 998311 for management consulting.
TDS (Tax Deducted at Source)
Tax deducted by the payer at the time of payment to the government. Common TDS rates: 1% (purchase of goods above Rs. 50 lakh), 2% (contractors), 10% (professional services). HelloBooks tracks TDS on purchases and sales.
TCS (Tax Collected at Source)
Tax collected by the seller from the buyer at the time of sale. Applies to specific goods (scrap, minerals) and e-commerce operators. HelloBooks supports TCS calculation and reporting.
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