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CA Final · Indirect Tax Laws · Job Work

Meena Auto Components (registered principal) sends tools and jigs and fixtures to a job worker on 1 April 2022 for use in manufacturing components. As of 1 June 2026, the tools have not been returned and no extension has been sought. Which statement is correct?

The deemed supply consequence does not apply to tools, jigs and fixtures, or moulds and dies. These items are carved out of the time-limit rule for capital goods, so their remaining with the job worker beyond three years does not by itself create a deemed supply.

  1. AThe tools are deemed supplied on 1 April 2022 because three years have lapsed
  2. BThe tools are deemed supplied on 1 April 2023 because one year has lapsed
  3. CThe deemed supply provisions for non-return within the time limit do not apply to moulds and dies, jigs and fixtures, or toolsCorrect
  4. DThe tools are deemed supplied on 1 April 2025 at the end of three years

Explanation

The deemed supply consequence for non-return of capital goods within three years specifically excludes moulds and dies, jigs and fixtures, or tools. So no deemed supply arises merely from the lapse of time. Option A wrongly applies the general capital goods rule.

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