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CA Final · Indirect Tax Laws · Job Work

Kiran Appliances Ltd (registered principal) sends inputs to Job Worker A, who after processing forwards the intermediate goods to Job Worker B, an unregistered person, for a further process. B generates metal scrap. Kiran wants the final goods supplied on payment of tax directly from B's premises and the scrap sold. Which statement is correct?

Kiran may supply the final goods from B's premises only after declaring B's place as an additional place of business, as B is unregistered and no notification applies. Since B is unregistered, the scrap must be supplied by Kiran, the principal.

  1. AKiran cannot send goods from one job worker to another; they must return to Kiran first
  2. BIntermediate goods are not inputs, so the one-year limit does not apply
  3. CThe scrap can be supplied by B directly on payment of tax since B is a job worker
  4. DKiran may supply from B's premises only if B's place is declared as its additional place of business (B being unregistered and no notified goods); scrap is supplied by Kiran as B is unregisteredCorrect

Explanation

The principal may send goods onward from one job worker to another. Supply from a job worker's place requires that place to be declared an additional place of business unless the job worker is registered or the principal deals in notified goods. B is unregistered, so declaration is needed. Waste and scrap may be supplied by the job worker only if registered, otherwise by the principal. Intermediate goods count as inputs by the Explanation, so the time limit applies.

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