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CA Final · Indirect Tax Laws · Job Work

Sundaram Auto Pvt Ltd, a registered manufacturer in Coimbatore, sent 500 kg of steel bars (inputs) on 1 June 2025 directly from its supplier's premises to a job worker, Kavin Engineers, who received them on 10 June 2025. Sundaram took ITC on the inputs. The inputs were not received back or supplied from the job worker's place within the prescribed period. No extension was granted. From which date is the one-year period counted, and on which day is the supply deemed made?

When inputs go directly to the job worker, the one-year period runs from the date the job worker receives them, here 10 June 2025. If they are not returned or supplied in time, they are deemed supplied by the principal on the day they were sent out.

  1. ACounted from 1 June 2025; deemed supplied on 1 June 2025
  2. BCounted from 10 June 2025; deemed supplied on the day the inputs were sent outCorrect
  3. CCounted from 10 June 2025; deemed supplied on 10 June 2026
  4. DCounted from 1 June 2025; deemed supplied on 1 June 2026

Explanation

Where inputs are sent directly to a job worker, the one-year period is counted from the date of receipt by the job worker, i.e. 10 June 2025. If the inputs are not back or supplied in time, they are deemed supplied by the principal to the job worker on the day they were sent out. Options counting from 1 June ignore the proviso, and options using 2026 as the deemed supply date wrongly use the expiry date.

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