Common GST terms-2 | ITC, RCM, E way bill and Tax invoice

Hello, in this post we will discuss the common GST terms-2. We have discussed some more useful terms in our previous article which you can read here:

Common GST terms – CPIN, ARN, EVC, ISD, GST council

Here are a few terms which you might be searching for and you will find it useful.

1. What is ITC under GST?
2. Meaning of RCM under GST?
3. What is e-way bill under GST?
4. Meaning of GST tax invoice?

What is Input Tax Credit or ITC under GST?

Input tax credit refers to claiming the credits on the taxes that are paid on inputs. We also refer to it as “ITC”

Before GST came into existence there were no cross credits on the VAT, Service tax, Excise, and other taxes. Since GST is a unified tax system, its important feature is that there will be a seamless flow of credit. So, there is a benefit of claiming cross credits resulting in the reduction of the tax liabilities and the cost of the goods.

What is the Reverse Charge Mechanism or RCM under GST?

Usually, the supplier pays the tax on goods and services on supply. But, in case of reverse charge, the recipient or the receiver becomes liable to pay the tax.

What is e-way bill under GST?

E-way bill is the short form of Electronic way bill. It is a document or a bill for the movement of goods and services from the supplier to the recipient. It is generated in the e-way bill common portal.

This document is provided if the value of goods exceeds Rs. 50000. It is compulsory for a registered dealer to transport goods with an e-way bill.

What is a GST tax Invoice?

A GST tax invoice or a bill is a commercial instrument where a list of goods sent and services provided by the GST registered seller to the buyer for the amount due for payment.