The Central Board of Indirect Taxes and Customs (CBIC) on December 31, 2024, issued a circular regarding clarifications on the availability of input tax credit in respect of goods that have been delivered by the supplier at his place of business under Ex-Works Contract
The following has been stated: -
•The GST Board has clarified that under Ex-Works contracts in the automobile sector, input tax credit (ITC) can be claimed by dealers when goods (vehicles) are handed over to the transporter at the OEM's factory gate, even if the vehicles are not physically received at the dealer’s premises.
•Some field formations had incorrectly insisted on ITC being claimed only after the physical receipt of goods.
•The clarification reaffirms that ITC can be availed when goods are deemed received, as per the terms of the contract. Dealers must ensure goods are not diverted for non-business purposes to retain eligibility for ITC.
The detailed circular is given in the document below.
[Circular No. 241/35/2024-GST]
