Section 19 of CGST Act: Input Tax Credit (ITC) of ‘Inputs and Capital Goods’ sent for Job Work

Home   /   Section 19 of CGST Act: Input Tax Credit (ITC) of ‘Inputs and Capital Goods’ sent for Job Work

(1) Principal allowed to take Input Tax Credit (ITC) on Inputs sent to a Job Worker for Job Work [Section 19(1)]

The principal shall, be allowed input tax credit on inputs sent to a job worker for job work this shall be subject to such conditions and restrictions as may be prescribed.

(2) Input Tax Credit (ITC) allowed to Principal even if Inputs are sent to a Job Worker directly [Section 19(2)]

The principal shall be entitled to take credit of input tax on inputs even if the inputs are directly sent to a job worker for job work without being first brought to his place of business.

(3) Consequences If Inputs sent for Job Work are not received back by the Principal [Section 19(3)]

Where the inputs sent for job work arc not received back by the principal—

— after completion of job work or otherwise or

— are not supplied from the place of business of the job worker in accordance with section [143(1)(a) or(b)]

— within one year of being sent out,

it shall be deemed that such inputs had been supplied by the principal to the job worker on the day when the said inputs were sent out.

Where the inputs arc sent directly to a job worker, the period of one year shall be counted from the date of receipt of inputs by the job worker.

The period of 1 year mentioned above shall not be applicable in case of moulds and dies, jigs and fixtures, or tools sent out to a job worker for job work.

Section 143 of CGST Act, 2017 states that a Principal under intimation and subject to such conditions as may be prescribed can send inputs or capital goods to a job worker without payment of tax for further process or treatment and from there subsequently to another job worker(s) and shall either bring back such inputs/capital goods after completion of job work or otherwise within 1 year / 3 years of their being sent out or supply such inputs/capital goods after completion of job work or otherwise within I ycar!3 years of their being sent out, from the place of business of a job worker on payment of tax within India or with or without payment of tax for export.

Input Tax Credit (ITC) on Capital Goods sent to a Job Worker [Section 19(4), (5) and (6)]

The principal shall be allowed input tax credit on capital goods sent to a job worker for job work.

The principal shall be entitled to take credit of input tax on capital goods even if the capital goods are directly sent to a job worker for job work without being first brought to his place of business.

Where the capital goods sent for job work arc not received back by the principal within a period of 3 years of being sent out, it shall be deemed that such capital goods had been supplied by the principal to the job worker on the day when the said capital goods were sent out.

Where the capital goods arc sent directly to a job worker, the period of 3 years shall be counted from the date of receipt of capital goods by the job worker.

The period of 3 years mentioned above shall not be applicable in case of moulds and dies, jigs and fixtures, or tools sent out to a job worker for job work,

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