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CMA Final · Indirect Tax Laws and Practice · Transition to GST (Transitional Provisions)

Sundaram Engines Ltd removed excisable goods without payment of duty to a testing laboratory before the appointed day, for tests not amounting to manufacture. The goods are returned on or after the appointed day within the permitted period. Which statement is correct under the transitional job work provisions?

No tax is payable on return, provided the goods return within the permitted period and the manufacturer and job worker declare the stock details held on the appointed day in the prescribed form and manner. The other premises need not be registered.

  1. ANo tax is payable on return, but only if the manufacturer and job worker declare details of goods held in stock on the appointed day as prescribedCorrect
  2. BNo tax is payable only if the laboratory is a registered person
  3. CTax is payable on return, since tests are not manufacture
  4. DNo tax is payable and no declaration is needed in any case

Explanation

Section 141(3) covers goods sent to any other premises, whether registered or not, so registration of the laboratory is not required. Section 141(4) makes the no-tax benefit conditional on the manufacturer and job worker declaring details of goods held in stock on the appointed day in the prescribed form, manner and time.

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