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
GST (Goods and Services Tax)
India's unified indirect tax replacing multiple central and state taxes. Applied at 5%, 12%, 18%, or 28% rates. Includes CGST (central), SGST (state), and IGST (inter-state). HelloBooks fully supports GST compliance.
CGST & SGST
Central GST (CGST) and State GST (SGST) are levied equally on intra-state supplies. For example, 18% GST on a local sale = 9% CGST + 9% SGST. Both go to different government levels.
IGST (Integrated GST)
GST levied on inter-state supplies and imports. IGST equals the full GST rate (e.g., 18% IGST vs 9% CGST + 9% SGST). The central government distributes the state portion to the destination state.
GSTIN
A 15-digit GST Identification Number assigned to every registered taxpayer in India. Format: 2 digits state code + 10 digits PAN + 1 digit entity number + 1 blank + 1 check digit. Must appear on all GST invoices.
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