Indirect Tax Laws · Job Work

ITC on Inputs Sent for Job Work (Section 19 CGST Act)

Updated 5 October 2026 · Fact-checked

Section 19 lets a registered principal claim input tax credit on inputs sent to a job worker, even if the goods go straight from the supplier to the job worker. The inputs must return, or be supplied from the job worker's premises, within one year. Otherwise they are treated as supplied on the day they were sent out.

Understand ITC on Inputs Sent for Job Work (Section 19)

A principal sends goods to a job worker to be processed. The goods stay the principal's property. So the principal should not lose ITC just because the goods are not in his own premises. Section 19 gives this comfort.

The principal who is a registered person can take ITC on inputs sent for job work, subject to the prescribed conditions (Section 19(1)). The principal can take credit even if the supplier delivers the inputs directly to the job worker and they never reach the principal's place of business (Section 19(2)).

The benefit comes with a time limit. Inputs must be received back after job work, or supplied from the job worker's place as allowed by Section 143, within one year of being sent out. Under Section 143, the principal may supply goods from the job worker's premises if the job worker is registered, or the place is declared as the principal's additional place of business, or the goods are of a notified class. Inputs are sent out under a delivery challan.

If the inputs are not back or supplied within one year, they are deemed to have been supplied by the principal to the job worker on the day they were sent out. Under Section 143(3), the principal must pay tax on that deemed supply, with interest. The tax is at the rate applicable to those inputs. It is CGST and SGST/UTGST if the supply is intra-state, and IGST if it is inter-state.

Capital goods have a longer period of three years under Section 19, other than moulds and dies, jigs and fixtures, and tools. Moulds and dies, jigs and fixtures, and tools are outside that time limit and its deemed-supply rule. Here we focus on inputs.

Key rules to remember

ITC allowed: Registered principal + inputs sent for job work + prescribed conditions → ITC allowed (Section 19(1) and (2)); Allowed even if the inputs go directly to the job worker without first coming to the principal's place.
Time limit for inputs: Return or supply from job worker's premises within 1 year of sending out; Deemed supply arises if this is not met.
Deemed supply on default: Inputs not back in 1 year → deemed supplied on the date sent out; principal pays tax with interest (Section 143(3)); Tax is at the rate applicable to the inputs: CGST and SGST/UTGST if intra-state, IGST if inter-state. Interest runs from the date of sending out until payment.
Time limit for capital goods: 3 years (Section 19) for capital goods other than moulds and dies, jigs and fixtures, and tools; Covered in the separate topic on capital goods. Moulds and dies, jigs and fixtures, and tools are outside this time limit and the deemed-supply rule. None of this applies to inputs.
Reporting: Quarterly FORM GST ITC-04 by the principal; Reports goods sent to and received back from job workers. Keep the delivery challan.

How to solve ITC on Inputs Sent for Job Work (Section 19) questions

Use this order for any question on ITC and inputs sent for job work.

1Confirm the principal is a registered person and the goods are inputs, not capital goods.
2Check the ITC conditions: valid tax invoice, receipt of goods (deemed receipt if sent directly to the job worker) and payment of tax by the supplier.
3Note the date the inputs were sent out, or the date the job worker received them if they were sent directly. Add one year.
4Check whether the inputs came back, or were supplied from the job worker's premises, by that date. Look for the challan.
5If yes, ITC stays and nothing further is payable. If no, apply deemed supply on the date sent out.
6Compute GST on the value of the deemed supply at the applicable rate, and add interest from the sending-out date.
7Write the answer as provision, facts, conclusion, and mention ITC-04 reporting if relevant.

Quickest way: Date check and then branch

When to use it: For short MCQs and 5-mark case questions where dates and values are given.

Write the sent-out date and add one year.
Ask if the goods are back or sold from the job worker's place by then.
If yes, ITC is allowed and there is no tax.
If no, deemed supply from the sent-out date: tax plus interest.
Also check whether the goods are inputs, since capital goods follow a three-year period.

Common mistakes in ITC on Inputs Sent for Job Work (Section 19)

Saying ITC is lost when inputs are sent directly to the job worker.
Students think the goods must first reach the principal's premises.
Fix: Remember the direct-delivery rule in Section 19(2). ITC is allowed, subject to the conditions.
Ignoring the deemed supply when the one-year period is missed.
Students focus on ITC being allowed when the goods are sent out and forget the time limit.
Fix: On failure the inputs are deemed supplied on the date sent out, and the principal must pay tax with interest under Section 143(3).
Counting the deemed supply from the date the one year ends.
Students see the failure date and use it.
Fix: The supply is deemed on the day the inputs were sent out. Interest also runs from that date.
Applying the one-year limit to capital goods, or the three-year limit to inputs.
The two periods are learnt together and are mixed up.
Fix: Inputs: one year. Capital goods: three years under Section 19, other than moulds and dies, jigs and fixtures, and tools. Those three items are outside the time limit and the deemed-supply rule.
Ignoring the delivery challan and ITC-04.
Students treat them as procedure only.
Fix: Mention the challan and the quarterly ITC-04 in your answer, since ICAI marks the procedure.

Worked examples

Example 1

Aarav Ltd., a registered principal, sent inputs of value ₹5,00,000 to a job worker on 10 June 2025 under a challan and took ITC of ₹90,000 (GST at 18%). The inputs were neither returned nor supplied from the job worker's premises by 9 June 2026. What is the GST consequence?

Show the solution

The goods are inputs and the principal is registered, so ITC under Section 19 was allowed.
The one-year period from 10 June 2025 ended on 9 June 2026 with no return or supply.
So the inputs are deemed supplied by the principal to the job worker on 10 June 2025, and the principal must pay tax with interest (Section 143(3)).
GST on the deemed supply = 18% × ₹5,00,000 = ₹90,000. The rate is the rate applicable to the inputs. If the supply is intra-state, this is CGST ₹45,000 + SGST ₹45,000. If it is inter-state, it is IGST ₹90,000.
Interest is payable from 10 June 2025 until payment, at 18% a year under Section 50. No payment date is given, so the total cannot be fixed. For illustration, one full year of interest would be 18% × ₹90,000 = ₹16,200.

Answer: Aarav Ltd. must pay GST of ₹90,000 on the deemed supply (CGST ₹45,000 + SGST ₹45,000 if intra-state, or IGST ₹90,000 if inter-state), with interest at 18% a year from 10 June 2025 until payment.

Example 2

Rohan Traders (registered) buys inputs of ₹2,00,000 plus IGST of ₹36,000 and has the supplier deliver them directly to the job worker's factory. The goods never enter Rohan's premises. The tax invoice is in Rohan's name. Can Rohan claim ITC of ₹36,000?

Show the solution

Section 19 allows ITC even if inputs are sent directly to the job worker without first coming to the principal.
Rohan holds a valid tax invoice and the supplier has paid the tax. The other ITC conditions in Section 16 also apply.
Goods are treated as received by Rohan once delivered to the job worker on his direction.
The one-year period is generally counted from receipt by the job worker. Rohan must get the goods back, or supply them from the job worker's place, within that time.
Rohan must report the goods in ITC-04 and keep the challan trail.

Answer: Yes. Rohan can claim ITC of ₹36,000, subject to the conditions of Section 16. He must ensure return or supply from the job worker's premises within one year to avoid deemed supply.

Exam tips

Cite Section 19 for inputs and say one year. Do not mix it with the capital goods period.
Say that ITC is allowed on direct delivery to the job worker. This line often carries a mark.
Always state the deemed supply date as the date of sending out.
Link your answer to Section 143, the challan and ITC-04 to show procedure.
In MCQs, read the dates carefully, since the year is counted from sending out.

Practice questions from Job Work

ITC on Inputs Sent for Job Work (Section 19): frequently asked questions

What is the time limit for inputs sent for job work?

The inputs must return to the principal, or be supplied from the job worker's place, within one year of being sent out. If not, they are treated as supplied on the date of sending out.

Can the principal claim ITC if goods go directly to the job worker?

Yes. Section 19 allows ITC even when the supplier delivers inputs directly to the job worker, subject to the prescribed conditions. The principal must be registered and hold a valid invoice.

What happens if inputs are not returned within one year?

They are deemed supplied by the principal to the job worker on the date they were sent out. Under Section 143(3), the principal pays tax on that supply with interest. The tax is at the rate applicable to the inputs, as CGST and SGST/UTGST or as IGST depending on whether the supply is intra-state or inter-state.

Does the same limit apply to capital goods?

No. Capital goods have a three-year period under Section 19, other than moulds and dies, jigs and fixtures, and tools. Those three items are outside the time limit and the deemed-supply rule.