There are many types of GST, but the basic idea behind the taxation system is simple enough - taxing the cost of both manufacturing and distributing a good or service. GST returns are a document that will contain all the details of your sales, purchases, tax collected on sales (output tax), and tax paid on purchases (input tax). Once you file GST returns, you will need to pay the resulting tax liability (money that you owe the government). Input Tax Credit or ITC is the tax that a business pays on a purchase and that it can use to reduce its tax liability when it makes a sale. In Other words Input Tax Credit means claiming the credit of the GST paid on the purchase of goods and services which are used for the furtherance of business.