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Lesson

Input Tax Credit

The Input Tax Credit mechanism allows businesses to subtract the GST they paid on purchases from the GST collected on sales. This prevents double taxation and ensures that tax is charged only on the value a business adds. For example, if a shopkeeper pays GST when buying goods from a wholesaler, they can claim that credit when selling to customers. This process encourages businesses to buy from registered suppliers and maintain accurate records.

45min lesson

Objectives3 goals Lesson8 blocks Review6 assets Practice31 items

Learning objectives

What to understand

3 goals

Start lesson

Understand input tax credit in the Goods and Services Tax (GST) chapter.
Connect the idea with formulas, examples, and exam-style questions.
Use flashcards, notes, MCQs, and LAQs to check readiness.

Lesson

Step-by-step lesson

8 sections

Example

Calculating Final Price After Discount and Adding GST

A shirt is marked at ₹ 1500 with a discount of 20%. If the final price includes 18% GST, what is the final bill? 1. Discounted price = ₹1500.0 × (1 - 20.0/100) = ₹1200.00. 2. GST = 18.0% of ₹1200.00 = ₹216.00. 3. Final bill = ₹1200.00 + ₹216.00 = ₹1416.00. Final answer: ₹1416.00 Exam tip: Calculate the discounted price first, then add GST. Common mistake: Adding GST to the marked price instead of the discounted price.

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Study path

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8 lesson sections2 cards / 4 notes17 MCQs / 14 written questions

Lesson Notes Flashcards Revision MCQs Written answers Topic test

Notes

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4 notes

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1
Input Tax Credit (ITC) and Its Importance
2
GST Registration and Compliance
3
Benefits of GST for Consumers and Businesses
4
Challenges and Limitations of GST

Practice

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31 prompts

17 MCQs14 LAQsMixed test

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In this chapter

Goods and Services Tax (GST)

Topic 4 of 7

Now on Input Tax Credit. Next up: GST Slabs and Taxable Value.

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Goods and Services Tax (GST)
CGST, SGST, and IGST
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Input Tax Credit

What to understand

Step-by-step lesson

Calculating Final Price After Discount and Adding GST

Discount Before Applying GST

Input Tax Credit (ITC) and Its Importance

GST Registration and Compliance

Benefits of GST for Consumers and Businesses

Challenges and Limitations of GST

Input Tax Credit (ITC)

Who finally bears GST

Calculating Final Price After Discount and Adding GST

Choose your next activity

Note highlights

Input Tax Credit (ITC) and Its Importance

GST Registration and Compliance

Benefits of GST for Consumers and Businesses

Challenges and Limitations of GST

Check this topic

Goods and Services Tax (GST)

Mark this topic complete

Around this topic

Input Tax Credit

What to understand

Step-by-step lesson

Calculating Final Price After Discount and Adding GST

Discount Before Applying GST

Input Tax Credit (ITC) and Its Importance

GST Registration and Compliance

Benefits of GST for Consumers and Businesses

Challenges and Limitations of GST

Input Tax Credit (ITC)

Who finally bears GST

Calculating Final Price After Discount and Adding GST

Choose your next activity

Note highlights

Input Tax Credit (ITC) and Its Importance

GST Registration and Compliance

Benefits of GST for Consumers and Businesses

Challenges and Limitations of GST

Check this topic

Goods and Services Tax (GST)

Mark this topic complete

Around this topic