{"id":14609,"date":"2025-09-22T06:59:09","date_gmt":"2025-09-22T06:59:09","guid":{"rendered":"http:\/\/tezgyan.com\/index.php\/2025\/09\/22\/gst-2-0-rollout-today-what-is-input-tax-credit-and-how-it-benefits-businesses-business-news\/"},"modified":"2025-09-22T06:59:09","modified_gmt":"2025-09-22T06:59:09","slug":"gst-2-0-rollout-today-what-is-input-tax-credit-and-how-it-benefits-businesses-business-news","status":"publish","type":"post","link":"https:\/\/tezgyan.com\/index.php\/2025\/09\/22\/gst-2-0-rollout-today-what-is-input-tax-credit-and-how-it-benefits-businesses-business-news\/","title":{"rendered":"GST 2.0 Rollout Today: What Is Input Tax Credit And How It Benefits Businesses | Business News"},"content":{"rendered":"


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Last Updated:<\/span>

The new regime has also reduced GST on services such as salons, spas, gyms, fitness centres and yoga institutes from 18 per cent with input tax credit to 5 per cent without it.<\/h2>\n
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To claim ITC, businesses must be registered under GST.<\/p>\n<\/figure>\n

The tax system of India is undergoing major changes from September 22, with a new structure of Goods and Services Tax (GST) coming into effect. The four tax slabs existing have now been merged into two \u2014 5 per cent and 18 per cent. Whereas, the \u2018sin goods\u2019 like tobacco and luxury items fall under the special 40 per cent slab.<\/p>\n

The GST Council, led by Finance Minister Nirmala Sitharaman, announced these sweeping changes earlier this month with the aim of a simpler structure to boost consumption and improve compliance.<\/p>\n

Cheaper Insurance, Lower GST on Services<\/strong><\/p>\n

Health and life insurance policies would not be subject to taxes under GST 2.0, which will lower their cost. The goal of the action is to boost financial inclusion nationwide and persuade more people to choose coverage. Although this lowers the cost of services for customers, insurance companies may see an increase in expenditures as they will no longer receive the input tax credit for their operating expenses.<\/p>\n

Additionally, the GST on services like salons, spas, gyms, fitness centres, and yoga institutions has been lowered under the new regime from 18 per cent with input tax credit (ITC) to 5 per cent without ITC.<\/p>\n

What is Input Tax Credit?<\/strong><\/p>\n

The input tax credit system allows businesses to reduce the burden of tax, claiming credit for the GST already paid on purchases or expenses. It helps to monitor that taxes are paid only on the value added at each stage, evading multiple tax payments.<\/p>\n

For example, if a manufacturer pays Rs 36,000 GST on raw materials worth Rs 2 lakh and charges Rs 72,000 GST on the selling product worth Rs 4 lakh, they can claim a credit of Rs 36,000. The effective tax liability then becomes Rs 36,000 instead of Rs 72,000.<\/p>\n

To claim ITC:<\/strong><\/p>\n

\u2013 Businesses must be registered under GST<\/p>\n

\u2013 Hold valid tax invoices<\/p>\n

\u2013 Receive goods or services in full<\/p>\n

\u2013 Ensure suppliers have paid GST and filed returns.<\/p>\n

Claims must also be made within specified deadlines: Before the annual return filing date or by November 30 of the following financial year.<\/p>\n

Conditions and Restrictions<\/strong><\/p>\n

On lost and stolen goods, a company cannot claim ITC. Items used for personal purposes, employee benefits, or certain services like catering are also not in this list.<\/p>\n

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Buzz Staff<\/a><\/p>\n

A team of writers at News18.com bring you stories on what\u2019s creating the buzz on the Internet while exploring science, cricket, tech, gender, Bollywood, and culture.<\/p>\n<\/div>\n<\/div>\n

A team of writers at News18.com bring you stories on what\u2019s creating the buzz on the Internet while exploring science, cricket, tech, gender, Bollywood, and culture. <\/p>\n<\/div>\n<\/div>\n

Click here<\/a> to add News18 as your preferred news source on Google. Stay updated with all the latest business news, including market trends<\/a>,\u00a0stock updates<\/a>,\u00a0tax<\/a>, IPO,\u00a0banking finance<\/a>, real estate, savings and investments. To Get in-depth analysis, expert opinions, and real-time updates. Also Download the\u00a0News18 App<\/a> to stay updated.<\/span><\/div>\n
Location :<\/span><\/p>\n

Delhi, India, India<\/span><\/p>\n<\/div>\n

First Published:<\/span><\/p>\n
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September 22, 2025, 12:12 IST<\/p>\n<\/div>\n<\/div>\n

News<\/a> business<\/a> GST 2.0 Rollout Today: What Is Input Tax Credit And How It Benefits Businesses<\/span><\/div>\n
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Last Updated:September 22, 2025, 12:12 IST The new regime has also reduced GST on services such as salons, spas, gyms, fitness centres and yoga institutes from 18 per cent with input tax credit to 5 per cent without it. To claim ITC, businesses must be registered under GST. The tax system of India is undergoing…<\/p>\n","protected":false},"author":1,"featured_media":14610,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[45],"tags":[],"class_list":["post-14609","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/posts\/14609","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/comments?post=14609"}],"version-history":[{"count":0,"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/posts\/14609\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/media\/14610"}],"wp:attachment":[{"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/media?parent=14609"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/categories?post=14609"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/tags?post=14609"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}