This circular addresses the eligibility of input tax credit (ITC) under Ex-Works (EXW) contracts, primarily in the automobile sector. It clarifies that goods are deemed to be “received” by a registered person (e.g., dealer) when handed over to the transporter at the supplier’s (OEM’s) factory gate, as per the contract terms. In EXW contracts, property in goods transfers at the supplier’s premises when goods are handed over to the transporter. Hence, ITC can be availed at this point, even if the goods physically reach the dealer later. The circular also explains that ITC eligibility is contingent upon compliance with all provisions under Section 16 and Section 17, including the requirement that goods must be used or intended for use in business. Misuse or diversion of goods, including for non-business purposes, loss, or destruction, may result in ITC ineligibility. These principles are extended to all goods supplied under similar EXW contracts.