- Input tax credit lets you reduce your tax you have already paid on inputs and pay the remaining amount at the time of paying tax
- You pay taxes on the purchase when a product is purchased from a registered seller, and when you sell the product, you too collect the tax.
- With input credit, you can adjust the taxes paid at the time of purchase with the amount of tax on sales (output tax) and pay the balance liability of tax, i.e. tax on sale minus tax on the purchase.