Commerce · Ch 33 — Indirect Taxation
Input Tax Credit and the GST Council
Input Tax Credit and the GST Council
Input Tax Credit (ITC) is the mechanism at the heart of GST's cascading-effect solution: a registered dealer who has paid GST on their inputs (goods/services purchased for use in their business) can claim credit for that tax paid, and set it off against the GST they themselves must pay on their output supplies. This ensures GST is effectively levied only on the value added at each stage of the supply chain, not on the full value repeatedly — eliminating the old "tax on tax" problem.
GST Council — a constitutional body (Article 279A) comprising the Union Finance Minister (as Chairperson) and the Finance/Revenue Ministers of every State and Union Territory, responsible for making recommendations on GST rates, exemptions, thresholds, and administrative matters, ensuring a cooperative-federalism approach where both the Centre and states have a voice in shaping the tax. …
The credit a registered dealer can claim for GST already paid on purchases (inputs), which is set off against the GST payable on their own sales (outputs), so tax is effectively levied only …
A constitutional body under Article 279A, chaired by the Union Finance Minister and comprising each State/UT's Finance Minister, that recommends GST rates, exemptio …