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CA Final · Indirect Tax Laws · Job Work

Ravi Textiles Pvt Ltd (Surat, registered) sent 500 metres of fabric (inputs) to an unregistered job worker for dyeing on 1 June 2025 under intimation, without payment of tax. The fabric was neither received back nor supplied from the job worker's premises by 31 May 2026, and the Commissioner has not granted any extension. What is the GST consequence?

The inputs are deemed supplied by the principal to the job worker on 1 June 2025, the day they were sent out. The one-year limit has lapsed without return or supply from the job worker's place, so the deeming rule applies from the dispatch date, not the expiry date.

  1. ANo consequence, because inputs sent for job work can stay with the job worker for any period
  2. BThe inputs are deemed supplied by Ravi Textiles to the job worker on 1 June 2025, the day they were sent outCorrect
  3. CThe inputs are deemed supplied on 31 May 2026, the day the one-year period ends
  4. DThe inputs are deemed supplied on the date the job worker finally returns them

Explanation

If inputs are not received back or supplied from the job worker's place within one year of being sent out, they are deemed supplied by the principal to the job worker on the day they were sent out, i.e. 1 June 2025. Option C picks the expiry date, which is wrong because the deeming relates back to the dispatch date.

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