We know that
Tax on Purchase is called Input GST
Tax on Sales is called Output GST
GST Credit=Input GST-Output GST
This Input GST is technically called Input Tax Credit (ITC)
This GST Credit is technically called Closing Input Tax Credit (ITC)
Question
Suppose in April
Purchase of a Company= 20000
Sales of a Company =30000
GST Rate =5%
What is ITC of April
View answer
Output GST=30000*5%=1500
Input GST=20000*5%=1000
GST Payable-1500-1000=500
GST Credit=0
Hence,
ITC of April =1000
Closing ITC of April = 0