Question

Input Tax Credit (ITC) is the deduction of the input tax from the output tax.

• A. True
• B. False

Answer 1

The correct option is A

True

GST is levied and collected at every stage of trading from manufacturer to consumer. When trader pays GST at the time of purchase, it is called Input Tax and he collects GST at the time of sale which is called Output Tax. At the time of paying GST to the government a trader deducts the input tax from the output tax and pays the remaining tax. This deduction of input tax is called Input Tax Credit.