The Government of Rajasthan on January 07, 2025, issued clarifications on the availability of input tax credit in respect of goods, which have been delivered by the supplier at his place of business under an Ex-Works Contract.
The following has been stated: -
•The Chief Commissioner clarified that under the Rajasthan GST Act, dealers can avail of Input Tax Credit (ITC) on goods delivered under an Ex-Works contract when the goods are handed over to the transporter at the supplier's factory gate, as long as the goods are intended for business use.
•ITC is not dependent on physical receipt at the dealer's premises but on the legal transfer of goods.
•If the goods are diverted for non-business purposes or disposed of improperly, the ITC will be denied. The conditions of sections 16 and 17 of the RGST Act must still be met for ITC eligibility.
The detailed circular is given in the document below.
[GST Circular No. 02/2025]
