Delhi GST Dept Clarifies ITC Availability on Supply of Goods in Ex-Works Contracts

The Delhi GST Department has issued a clarification regarding the availability of Input Tax Credit (ITC) on goods supplied under "Ex-Works" contracts. In an Ex-Works contract, the seller's responsibility ends once the goods are made available at their own premises, and the buyer is responsible for arranging and paying for the transportation. The clarification states that the recipient of the goods (the buyer) is eligible to claim ITC on the GST paid for the transportation service, even though the delivery is taken from the seller's factory gate. This is because the freight cost is incurred by the buyer in the course of their business. This advisory provides much-needed clarity for businesses, confirming that the place of delivery in the contract does not affect the buyer's eligibility to claim ITC on the transportation costs they bear.