Hello everyone today we discuss ITC Full form. The full and detailed meaning of ITC complete form. What was the full form means to be shall we discuss as.
Generally, the full description of the ITC complete form is commonly known as a company which was named ‘Imperial Tobacco Company of India Limited’; this established in 1910.
Laterly, it was re-named as ‘Indian Tobacco Company Limited.’ Since it remained as “ITC.” Ltd. and listed as it is named.
Instead of as our topic is about “ITC full form in GST.” So we are focusing on ITC full form in GST, which means to be “Input Tax Credit.”
What is ITC full form in Gst? (INPUT TAX CREDIT)
What is Input Tax?
- Input Taxes:
Payment of taxes on Inward Supply of inputs and goods like capital goods, input services is called input taxes.
- Inputs (Factors of Production):
It means as raw material, labor, and utilities used for production (other than capital goods)
- Outputs (Finished Goods):
After using raw material and processing them, final production made in this processing is called outputs.
- Inward Supply:
The supply of the goods which was received by a taxpayer or a person in business is called inward supply.
- Capital Goods:
Capital Goods are useful in producing a production of goods or services in business and considered as a business asset, i.e., machines, fixtures, and fittings, etc.
In short, assets that capitalized in books of accounts are called Capital Goods.
- Input Services:
Services that are not visible in physical form.
- Input Credit:
It means to be taxes paid previously on inputs, which later deducted from the output and remaining amount payable as taxes on information—the remaining balance amount deductible as is called input credit.
Taxes paid on the input set off against output supplies is called credit given on input taxes.
- Input Tax Credit:
Input Tax Credit full form, which means the ITC is the main base point of GST. It utilized to reduce cascading effects in GST.
Tax on Tax which is increases the cost of goods and services.
The first time ITC is introduce in GST in before taxes, there is no provision for credit is being propose and leading to increases in cascading effects, and burden goes on the value of goods and services.
Input Tax Credit reduces these deficiencies by implementing in GST and gives the seamless flow of supply of chain.
The availability of Input Tax Credit is to the person, first of all, gets to registered under GST. An unregistered person is to claim first for GST registration.
Eligibility for ITC Full Form:
- Registered Persons
- Unregistered Persons not liable for credit unless registered.
- Components of cost of capital goods – registered person claims on these components not allowed for the input tax credit.
- Invoice and Debit note – registered person shall not be entitle to claim the input tax credit.
- Invoice Note:
We recorded sales transactions that are complete.
- Debit Note:
A recorded past transaction remains unpaid.
Claiming of Input Tax Credit:
Documentation to claim input tax credit the ITC full form:
Input Tax Credit claim by the registered person (including Input Service Distributor):
- Invoice note
- Debit note
- Bill of entry
- Input Service Distributor invoice
- Input Service Distributor credit note
With all these documents, only registered persons furnished in Form GSTR-2.
Conditions for Taking Input Tax Credit In GST
- For claiming ITC registered taxable must follow the following conditions:
- He should have tax Invoice and Debit note or other such documents for payment of Tax.
- He should have received goods and services or both.
- When supply made for the Government supplier should have paid Tax charged on the purchase.
- He should furnished return under section 39.
Ineligible Input Tax Credit (ITC Full Form) :
ITC not eligible for Motor Vehicles and Conveyance:
Such Motor Vehicle (used for transport persons) not allowed for claiming ITC that having seating capacity less than or equal to 13 persons, including the driver. It includes vessels and aircraft.
- Food and other items like health services.
- Services related to the motor vehicle, vessels like insurance, maintenance, and repairs.
- Selling of membership for fitness or any club such related fees not allowed for ITC.
- Insurance like health insurance
- Work contract
- Construction contracts on immovable property
- Composition Scheme
- Not authorized for personal use
- Not allowed for non-residents
- Stolen or destroyed Goods
- Not allowed in fraud cases
- Not allowed for Restaurants
What is ITC in GST ?
ITC or Input Tax Credit means a method of reducing taxes paid on every stage of supply i.e., form input to output of goods and services and this made impact on value of products.
What does ITC stands for ?
ITC stands for an Indian company name as Indian Tobacco Company Limited. The company have base headquarter in Kolkata.
What is eligible ITC ?
Registered person is eligible to get benefit of input tax credit. This eligiblity given to registered person on certain condition as like he can use goods and services for only business purpose.
Who can claim ITC ?
Input Tax Credit claim by the registered person and it includes input service distributor with having certain documentation for example invoice note, debit note etc.
What is input tax credit with example ?
For example, a manufacturer paids tax on produce goods is Rs. 1,500 (on output product). But tax paid on raw material (on input material ) is Rs.1,000. Then he can claim for Rs. 500 as input credit.