ITC Claims under Ex-Works Contracts

Last updated: 02 January 2025

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This notification clarifies the availability of Input Tax Credit (ITC) under the Central Goods and Services Tax Act, 2017, specifically for Ex-Works contracts. It addresses queries from the automobile sector regarding ITC for goods delivered by the supplier to their own place of business.

Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing

North Block, New Delhi,
Dated the 31st December, 2024

To,

The Principal Chief Commissioners/ Chief Commissioners of Central Tax (All)
The Principal Directors General/ Directors General (All) Madam / Sir,

Subject: Clarification on availability of input tax credit as per clause (b) of sub-section (2) of section 16 of the Central Goods and Services Tax Act, 2017 in respect of goods which have been delivered by the supplier at his place of business under Ex-Works Contract-reg.

Reference has been received from automobile sector seeking clarification on availability of input tax credit (hereinafter referred to as “ITC”) as per clause (b) of sub-section (2) of section 16 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”) in respect of goods which have been delivered by the supplier at his place of business under Ex-Works Contract.

Official copy of the circular has been attached

FAQ :

The notification clarifies the availability of input tax credit (ITC) under clause (b) of sub-section (2) of section 16 of the CGST Act, 2017, concerning goods delivered by a supplier at their place of business under an Ex-Works contract.

The automobile sector has sought clarification on this matter.

Clause (b) of sub-section (2) of section 16 of the Central Goods and Services Tax Act, 2017 is being referred to.

An Ex-Works contract, in this context, refers to a situation where goods are delivered by the supplier at their own place of business.

The purpose is to provide a clarification on the availability of input tax credit (ITC) for goods supplied under Ex-Works contracts.