Accounting glossary
What is Input tax credit (ITC)?
The GST/HST a registered business paid on its purchases, claimable against the GST/HST it collected on sales. You remit the difference. Missing ITCs is donating money; claiming ineligible ones is an audit finding — records decide which side you are on.
Example
You collect $10,000 of GST/HST on sales and pay $3,000 on business purchases. You remit $7,000 — the $3,000 of input tax credits comes off what you owe.
This is why registration often pays for itself even below the small-supplier threshold: unregistered, that $3,000 is simply a cost.
In SeroBooks
Purchase taxes are tracked per line, so the return's ITC side builds itself. Canadian sales tax →