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CA Final · Indirect Tax Laws · Job Work

Meera Engineering Ltd sent machine parts (inputs) on 1 March 2025 to a job worker, Rohan Works, which is not registered. Meera has not declared Rohan's premises as its additional place of business, and no notification covers its goods. Rohan generates scrap during job work. Meera also wants to supply the finished goods directly to its customer from Rohan's premises. Which statement is correct?

Meera can supply the scrap because the job worker is unregistered, but it cannot supply the finished goods from Rohan's premises unless it declares those premises as an additional place of business, as no exception for a registered job worker or notified goods applies.

  1. ARohan must pay tax on the scrap, since waste is always supplied by the job worker
  2. BMeera may supply the scrap, as the job worker is unregistered, but may not supply the finished goods from Rohan's premises without declaring them as its additional place of businessCorrect
  3. CMeera may supply the finished goods from Rohan's premises, but the scrap can be supplied only after return to Meera
  4. DNeither the scrap nor the finished goods may be supplied from Rohan's premises under any circumstances

Explanation

Section 143(5) lets scrap be supplied by the principal if the job worker is unregistered. Under the proviso to 143(1)(b), supply of goods from the job worker's premises needs the premises declared as an additional place of business unless the job worker is registered or goods are notified. Neither exception applies, so option B is correct.

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