CA Final · Indirect Tax Laws · Job Work

Iyer Metals Ltd sends steel sheets to a job worker, who cuts them into blanks and sends the blanks to a second job worker for plating, as intimated. Which statement about the blanks follows from section 143?

The blanks count as inputs because input includes intermediate goods arising from any process by the principal or job worker. The principal may send them on to a second job worker without payment of tax, and the one-year input limit continues to apply.

1. ABlanks are not inputs, so the one-year limit does not apply to them
2. BBlanks, as intermediate goods arising from processing of inputs, are treated as inputs for job work purposes, and the movement to the second job worker is allowed without payment of taxCorrect
3. CMovement to a second job worker is allowed only after the goods come back to the principal's place of business
4. DBlanks become capital goods, so a three-year period applies