TaxTMI 
TaxTMI 
A supplier has started export of exempted goods like Rice, Wheat etc. Whether ITC can be claimed on the incidental expenses like Ocean freight, Insurance & Ware house charges. And if ITC is eligible whether refund of ITC can be claimed?
ITC on incidental expenses incurred for export of exempted goods
16 Apr 2025 
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Input Tax Credit on zero-rated exports of exempt goods can be claimed and unutilized credit refunded under refund procedure.
Export of goods that are exempt domestically is treated as zero-rated for IGST purposes; therefore ITC on inputs and input services used for such exports, including freight, insurance and warehousing, is claimable except to the extent blocked by credit blocking provisions. Where exports are made under LUT/bond without payment of tax, unutilized ITC attributable to those zero-rated exports may be claimed as a refund under the CGST refund procedure, subject to prescribed conditions and administrative guidance. (AI Summary)
Export of goods that are exempt domestically is treated as zero-rated for IGST purposes; therefore ITC on inputs and input services used for such exports, including freight, insurance and warehousing, is claimable except to the extent blocked by credit blocking provisions. Where exports are made under LUT/bond without payment of tax, unutilized ITC attributable to those zero-rated exports may be claimed as a refund under the CGST refund procedure, subject to prescribed conditions and administrative guidance. (AI Summary)