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CA Final · Indirect Tax Laws · Job Work

Mehta Auto Components Ltd. sends dies and jigs to a job worker in Pune for manufacturing components. Four years later the dies and jigs have still not been received back, and no extension was sought. Which statement is correct under the CGST Act, 2017?

No deemed supply arises. Moulds and dies, jigs and fixtures, and tools are excluded from the one-year and three-year time limits, so keeping them with the job worker beyond three years does not trigger a deemed supply by the principal.

  1. AThe dies and jigs are deemed supplied on the day they were sent out, as the three-year limit has expired
  2. BThe dies and jigs are deemed supplied on the date of the fourth anniversary of dispatch
  3. CThe deemed supply provisions for the time limit do not apply to moulds and dies, jigs and fixtures, or toolsCorrect
  4. DThe deemed supply applies only if the job worker is unregistered

Explanation

Section 19(7) states that the deemed supply provisions of sections 19(3) and 19(6) do not apply to moulds and dies, jigs and fixtures, or tools. Section 143(1)(a) and (4) likewise exclude them from the time limits. So no deemed supply arises even after four years.

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