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CA Final · Indirect Tax Laws · Job Work

Kaveri Tools Ltd sends a set of jigs and fixtures to a job worker on 1 April 2022 for use in job work. The goods have not been returned even by 1 July 2026. Which statement is correct under the CGST Act?

No deemed supply arises. The one-year and three-year return limits, and the resulting deemed supply, do not apply to moulds and dies, jigs and fixtures, or tools, so their retention by the job worker beyond three years does not trigger tax.

  1. AThe jigs and fixtures are deemed supplied to the job worker on 1 April 2022 because three years have expired
  2. BThe jigs and fixtures are deemed supplied on 1 April 2023 because one year has expired
  3. CThe deemed supply provisions for time limits do not apply to moulds and dies, jigs and fixtures, or toolsCorrect
  4. DThe deemed supply arises only if the Commissioner issues a notice after three years

Explanation

Section 19(7) states that the deemed supply provisions of sub-sections (3) and (6) do not apply to moulds and dies, jigs and fixtures, or tools. Section 143(1)(a) and 143(4) also exclude them from the time limits. Hence the lapse of three or four years creates no deemed supply.

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