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CA Final · Indirect Tax Laws · Job Work

Sagar Plastics Ltd. sends moulds to Tara Moulders, a registered job worker, which generates waste and scrap during the job work on Sagar's inputs. Tara Moulders wants to sell the scrap directly from its own premises. Under the CGST Act, 2017, who may supply the waste and scrap, and how?

Tara Moulders, being a registered job worker, may supply the waste and scrap directly from its own place of business on payment of tax. The principal would supply it only if the job worker were unregistered.

  1. AOnly Sagar Plastics can supply it, after bringing it back to its place of business
  2. BTara Moulders may supply it directly from its place of business on payment of tax, since it is registeredCorrect
  3. CTara Moulders may supply it without payment of tax, because it arises in job work
  4. DSagar Plastics must supply it from Tara's premises, as scrap always belongs to the principal for supply purposes

Explanation

Waste and scrap generated during job work may be supplied by the job worker directly from his place of business on payment of tax if the job worker is registered. If the job worker is unregistered, the principal supplies it. Tara is registered, so Tara may supply it on payment of tax. No exemption from tax applies to such scrap.

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