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CMA Final · Indirect Tax Laws and Practice · Transition to GST (Transitional Provisions)

Excisable goods made by Kaveri Auto Ltd were removed before the appointed day, without payment of duty, to a premises (registered or not) for tests or a process not amounting to manufacture. Which statement is correct under the transitional job work provisions?

No tax is payable if the goods return within six months, extendable by up to two months on sufficient cause, and the manufacturer and job worker make the prescribed declaration. Whether the other premises is registered does not matter.

  1. ATax is payable on return only if the premises were unregistered
  2. BTax is payable on return in all cases because the goods were excisable
  3. CNo tax is payable if the goods return within six months (extendable by up to two months) and the required declaration is madeCorrect
  4. DNo tax is payable whatever the time taken to return the goods

Explanation

Section 141(3) gives relief irrespective of whether the other premises is registered or not, if the goods return within six months, extendable by up to two months. Section 141(4) makes relief conditional on the declaration of stock details. Failure to return in time makes input tax credit recoverable.

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