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CA Final · Indirect Tax Laws · Job Work

Mehta Dies Pvt Ltd, a registered principal, sends moulds and dies and jigs and fixtures to a job worker on 1 July 2021 under intimation, and they are still with the job worker on 1 August 2026. The inputs it sent on 1 July 2021 have also not returned. Which statement is correct?

The deemed supply rules do not apply to moulds and dies, jigs and fixtures, or tools, so no deemed supply arises for them. The inputs, however, were not returned within one year, so they are deemed supplied on 1 July 2021, the day sent out.

  1. ABoth the tools and the inputs are deemed supplied on 1 July 2021
  2. BOnly the tools are deemed supplied on 1 July 2021, since three years have passed
  3. CNeither is deemed supplied, because the inputs also enjoy the three-year period
  4. DThe deemed supply provisions do not apply to the moulds and dies and jigs and fixtures, but they do apply to the inputs, deemed supplied on 1 July 2021Correct

Explanation

Sections 19(7) and 143 exclude moulds and dies, jigs and fixtures, or tools from the time limits and deemed supply rules. Inputs not returned or supplied within one year are deemed supplied on the day sent out, here 1 July 2021, unless extended by the Commissioner. Option A wrongly includes the tools.

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