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CA Final · Indirect Tax Laws · Job Work

Dhruv Engineering Ltd. sent 2,000 kg of steel bars (input) to Nitin Forgings (a registered job worker) on 1 August 2024 under intimation. Nitin converted them into forged blanks (intermediate goods) and Dhruv wished to sell these blanks to a customer directly from Nitin's premises on 15 May 2025 on payment of tax. Nitin's place of business is not declared as Dhruv's additional place of business, and Dhruv does not deal in goods notified by the Commissioner. Under section 143, what is the position?

Dhruv may supply the blanks directly from Nitin's premises on payment of tax, because the job worker is registered under section 25, which is an exception to the additional-place-of-business requirement. The supply also falls within one year of sending out, and intermediate goods count as inputs.

  1. ADhruv cannot supply directly from Nitin's premises unless it declares those premises as its additional place of business
  2. BDhruv may supply from Nitin's premises since the intermediate goods are not 'inputs'
  3. CDhruv may supply from Nitin's premises because Nitin is registered under section 25Correct
  4. DDhruv may supply only after the blanks are first brought back to its own premises and one year has passed

Explanation

The proviso bars supply from the job worker's premises unless that place is declared as additional place of business, except where the job worker is registered under section 25 or the principal deals in notified goods. Nitin is registered, so the exception applies. The Explanation treats intermediate goods arising from processing as inputs, so option B's reasoning is wrong. The supply on 15 May 2025 is also within one year of dispatch. Option A overlooks the registered job worker exception.

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