Input Tax Credit reduces tax cascading by allowing credit for taxes paid on inputs, enabling neutral GST taxation. Input Tax Credit allows taxpayers to offset taxes paid on inputs-goods, services, capital goods and input services-against output tax liabilities to prevent cascading and maintain tax neutrality. The national framework progressed from a limited modified value added credit regime to CENVAT, which broadened credits and introduced Input Service Distributors, and culminated in a unified ITC structure under GST, with further operational details addressed in subsequent guidance.