CA Final · Indirect Tax Laws · Job Work

Nirmal Pharma Ltd. sends raw materials to Zenith Labs, a registered job worker. After processing, intermediate goods are produced. Nirmal wants to know whether these intermediate goods are treated as inputs for the job work provisions, including the one-year time limit. What does section 143 provide?

For job work, input includes intermediate goods arising from any treatment or process carried out on the inputs by either the principal or the job worker. So the intermediate goods are treated as inputs, and the one-year limit applies to them, not the three-year limit for capital goods.

1. AIntermediate goods are not inputs, so the one-year limit does not apply to them
2. BInput includes intermediate goods arising from any treatment or process carried out on the inputs by the principal or the job workerCorrect
3. CInput includes intermediate goods only when the process is carried out by the job worker, not the principal
4. DIntermediate goods become capital goods, so the three-year limit applies