input tax deduction

Input tax deduction is a process where a business subtracts the amount of sales tax (like VAT or GST) paid on purchases and expenses from the tax it owes on its sales. Essentially, when a business buys goods or services and pays tax on them, it can offset that amount against its own tax liability when selling products or services. This ensures that the tax is only paid on the value added at each stage of production or sale, preventing double taxation and helping businesses recover the tax they’ve already paid on their inputs.