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CA Final · Indirect Tax Laws · Job Work

Vardhan Engineering Ltd., a registered principal in Pune, sends 500 kg of steel (inputs) directly from its supplier's premises to the job worker, Mehta Forgings, on 1 August 2025. The steel is received by the job worker on 5 August 2025. Vardhan will treat the inputs as supplied to the job worker if they are neither received back nor supplied from the job worker's place within one year. From which date is the one-year period counted?

The one-year period is counted from 5 August 2025, the date the job worker received the steel. Where inputs go directly to a job worker without first reaching the principal, the proviso to section 19 starts the one-year period from the job worker's receipt, not from the supplier's dispatch.

  1. A1 August 2025, the date of the supplier's invoice
  2. B5 August 2025, the date the job worker received the inputsCorrect
  3. CThe date Vardhan's place of business first receives the finished goods
  4. DThe date on which the job work is completed

Explanation

Under section 19, where inputs are sent directly to a job worker, the one-year period is counted from the date the job worker receives them. Here that is 5 August 2025. The invoice or dispatch date is the wrong base, because the proviso specifically shifts the start to the date of receipt.

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