How to differentiate Input Tax Credit with Input Tax Stock?
What is Input Tax Credit? How does Input Tax Stock work under GST regime? What are the difference between Input Tax Credit and Input Tax Stock?
ITC is a mechanism to ensure that the supplier needs to pay GST in cash only on the value addition. ITC mechanism thereby avoids cascading of taxes that is ‘tax on tax’. Under the previous system of indirect taxation, credit of taxes being levied by Central Government was not available as set-off for payment of taxes levied by State Governments, and vice versa.
GST is a significant reform in the field of indirect taxes in our country. Multiple taxes levied and collected by the Centre and States would be replaced by one tax called Goods and Services Tax (GST). GST is a multi-stage value added tax on consumption of goods or ser-vices or both.
The details about Input Tax Credit and Input Tax Stock in simple language from GST terms have been mentioned in this web blog separately. We suggest you to read these articles on Input Tax Credit and Input Tax Stock, so as to enable you to have a clear idea on these GST terms.
For your immediate reference, we give below web links on Input Tax Credit and Input Tax Stock separately below. You may kindly read the below links to know more about Input Tax Stock and Input Tax Credit.
Meaning of Input Tax Credit Mechanism in GST
Input Tax Stock under GST
The above information easily explains about Input Tax Stock and Input Tax Credit.
We hope, you have satisfied with the difference between Input Tax Credit and Input Tax Stock explained above. Do you have different thought on difference between Input Tax Stock and Input Tax Credit?
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