GST Jamku AITransitional provisions relating to job work.
Section 141(1)
Where any inputs received at a place of business had been removed as such or removed after being partially processed to a job worker for further processing, testing, repair, reconditioning or any other purpose in accordance with the provisions of existing law prior to the appointed day and such inputs are returned to the said place on or after the appointed day, no tax shall be payable if such inputs, after completion of the job work or otherwise, are returned to the said place within six months from the appointed day:
Provided that the period of six months may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding two months:
Provided further that if such inputs are not returned within the period specified in this sub-section, the input tax credit shall be liable to be recovered in accordance with the provisions of clause (a) of sub-section (8) of section 142.
If, prior to the appointed day, any inputs were dispatched to a job worker for various processes like processing, testing, repair, or reconditioning in line with the pre-existing laws, and these inputs are returned to the original place of business on or after the appointed day, a crucial condition comes into play. If the said inputs return within six months from the appointed day, no tax is payable.
Extension Possibility
There's room for flexibility in this timeframe. The Commissioner may extend the six-month period by an additional two months if a valid and sufficient cause is presented.
Consequences of Delay
However, failing to meet the specified period has repercussions. If the inputs don't return within the stipulated timeframe, the input tax credit becomes subject to recovery as per the provisions outlined in clause (a) of sub-section (8) of Section 142.
This provision aims to strike a balance, ensuring a smooth transition for businesses engaged in job work activities while maintaining the integrity of the tax system.
Section 141(2)
Where any semi-finished goods had been removed from the place of business to any other premises for carrying out certain manufacturing processes in accordance with the provisions of existing law prior to the appointed day and such goods (hereafter in this section referred to as "the said goods") are returned to the said place on or after the appointed day, no tax shall be payable, if the said goods, after undergoing manufacturing processes or otherwise, are returned to the said place within six months from the appointed day:
Provided that the period of six months may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding two months:
Provided further that if the said goods are not returned within the period specified in this sub-section, the input tax credit shall be liable to be recovered in accordance with the provisions of clause (a) of sub-section (8) of section 142:
Provided also that the manufacturer may, in accordance with the provisions of the existing law, transfer the said goods to the premises of any registered person for the purpose of supplying therefrom on payment of tax in India or without payment of tax for exports within the period specified in this sub-section.
Extension Possibility
The Commissioner can extend this six-month period by an additional two months if there is a valid reason for the delay.
Input Tax Credit Recovery
However, if the said goods are not returned within the specified timeframe, the input tax credit will be recoverable according to the provisions of clause (a) of sub-section (8) of section 142.
Transfer to Registered Person's Premises
Alternatively, the manufacturer can, following the rules of the old law, transfer these goods to the premises of a registered person for the purpose of supplying them, either with the payment of tax in India or without the payment of tax for exports, within the period specified in this sub-section.
Section 141(3)
Where any excisable goods manufactured at a place of business had been removed without payment of duty for carrying out tests or any other process not amounting to manufacture, to any other premises, whether registered or not, in accordance with the provisions of existing law prior to the appointed day and such goods, are returned to the said place on or after the appointed day, no tax shall be payable if the said goods, after undergoing tests or any other process, are returned to the said place within six months from the appointed day:
Provided that the period of six months may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding two months:
Provided further that if the said goods are not returned within the period specified in this sub-section, the input tax credit shall be liable to be recovered in accordance with the provisions of clause (a) of sub-section (8) of section 142:
Provided also that the manufacturer may, in accordance with the provisions of the existing law, transfer the said goods from the said other premises on payment of tax in India or without payment of tax for exports within the period specified in this sub-section.
Transitional Provisions for Job Work
Section 141(3)
In situations where excisable goods are manufactured at a business location, and they are moved to another place for testing or other non-manufacturing processes without duty payment, certain transitional provisions come into play. These provisions are related to the time before the appointed day when the new law takes effect.
Goods Return within Six Months
If the goods, after undergoing tests or other processes, are returned to the original place within six months from the appointed day, no tax is required to be paid.
Extension of Time
However, the Commissioner has the authority to extend this period by an additional two months if a valid reason is provided.
Consequences of Delay
If the goods are not returned within the specified timeframe, the input tax credit becomes liable for recovery as per the provisions of clause (a) of sub-section (8) of section 142.
Option for Manufacturers
Manufacturers also have the option, following existing law provisions, to transfer the goods from the alternative premises either by paying tax in India or without tax payment for exports within the specified timeframe.
These provisions are crucial for managing the transition of goods between locations and ensuring compliance with the tax regulations during the job work processes.
Section 141(4)
The tax under sub-sections (1), (2) and (3) shall not be payable, only if the manufacturer and the job worker declare the details of the inputs or goods held in stock by the job worker on behalf of the manufacturer on the appointed day in such form and manner and within such time as may be prescribed.
According to Section 141(4), the tax specified in sub-sections (1), (2), and (3) does not need to be paid. However, there's a condition attached to this exemption. It applies only if both the manufacturer and the job worker jointly declare the details of the inputs or goods that the job worker holds on behalf of the manufacturer. This declaration must be made on the appointed day, following a specific form and manner as prescribed by the regulations.
In essence, this provision aims to streamline the taxation process during the transition, offering relief to manufacturers and job workers alike.