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CA Final · Indirect Tax Laws · Job Work

Arjun Dies Ltd, a registered principal, sent a set of moulds and dies, a batch of raw castings (inputs) and a CNC machine (capital goods) to a job worker on 1 July 2023. Nothing has been returned by 1 August 2026 and no extension has been granted. Which of these items is NOT subject to deemed supply under the job work provisions?

Moulds and dies are not subject to deemed supply, since the time limits do not apply to moulds and dies, jigs and fixtures, or tools. The raw castings and the CNC machine have both exceeded their limits and are deemed supplied.

  1. AThe raw castings
  2. BThe CNC machine
  3. CThe moulds and diesCorrect
  4. DAll three items are deemed supplied

Explanation

Inputs have a one-year limit and the CNC machine a three-year limit; both have lapsed by 1 August 2026, so both are deemed supplied on 1 July 2023. The deemed supply rule does not apply to moulds and dies, jigs and fixtures, or tools sent for job work. Choosing the CNC machine wrongly assumes its three-year period has not lapsed.

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