input tax


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Input Tax

In the United Kingdom, the value added tax that a business pays on the products it buys. This contrasts with the output tax, which is the VAT that the business charges customers on what it sells. If the output tax exceeds the input tax, the business must pay the difference to the government. On the other hand, if the input tax exceeds the output, the government refunds the difference to the business.

input tax

see VALUE ADDED TAX.
References in periodicals archive ?
While the abolishment of input tax credit was blamed for this, citizens stated that in the end, they were forced to bear the brunt of higher bills.
In absence of this clause, the customer is under no legal obligation to pay this portion of VAT, unless the customer is a tax-registered entity and can claim the VAT paid to insurers as input tax.
In the absence of this clause, the customer is under no legal obligation to pay this portion of VAT, unless the customer is a tax-registered entity and can claim the VAT paid to insurers as input tax.
A standard-rated supply is when the supplier charges VAT at 5pc, but is able to recover input tax incurred in making this supply.
CII also stressed upon the need for designing a fool- proof and effective return filing system where seamless and speedier input tax credit (ITC) can be availed by the recipient, as against the current requirement of filing three GST returns.
Only a taxable person registered for VAT may recover input tax therefore registering with FTA is the starting point for input tax recovery.
The selection is done by both the concerned Commissioner and Federal Board of Revenue (Audit selection is based on different risk parameters (viz-a-viz ITO, 2001, STA, 1990 and FEA, 2005) such as excess claim of P and L expenses, low profitability to assets ratio, consistently many years, high ratio of input tax to output tax and carry forward of input tax.
As the manufacturer has not incurred any input tax on his purchases, he has a net VAT payable to the tax authority of 0.
Listing the benefits of getting registered under GST, the ministry said that input tax credit can be passed on in the value chain and due taxes collected will come to the exchequer.
By introducing Input Tax Credit, the end consumer will only bear the GST charged by the last dealer in the supply chain, with set- off benefits at all the earlier stages," Anurag Ranjan, a chartered accountant, told Mail Today.
Several changes have been made to the input tax credit mechanism.
Register today for July sessions on FSA ID (July 11), Understanding Loan Repayment (July 19), and How to Manually Input Tax Information (July 27).