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CA Final · Indirect Tax Laws · Job Work

Kaveri Engineering Ltd purchased a CNC machine (capital goods) and had the supplier deliver it directly to the premises of a job worker on 10 August 2025, for use in job work for Kaveri. Which statement is correct about input tax credit and the time limit for bringing the machine back?

ITC is allowed even though the machine went directly to the job worker, and the three-year period for capital goods runs from the date the job worker received it. The requirement of first bringing goods to the principal's premises is relaxed for job work.

  1. AITC is not available until the machine is first brought to Kaveri's place of business
  2. BITC is available even though the machine was sent directly; the three-year period is counted from the date the job worker received the machineCorrect
  3. CITC is available, but the one-year period applies and is counted from the date of the supplier's invoice
  4. DITC is available only if the job worker is registered, and the three years run from the invoice date

Explanation

The principal may take credit on capital goods even if they go directly to the job worker without first coming to his place of business. In the direct-sending case, the three-year period is counted from the date of receipt by the job worker. One year applies to inputs, not capital goods.

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