GST Jamku AITaking input tax credit in respect of inputs and capital goods sent for job work.
Section 19(1)
The principal shall, subject to such conditions and restrictions as may be prescribed, be allowed input tax credit on inputs sent to a job worker for job work.
Section 19(2)
Notwithstanding anything contained in clause (b) of sub-section (2) of section 19, the principal shall be entitled to take credit of input tax on inputs even if the inputs are directly sent to a job worker for job work without being first brought to his place of business.
Section 19(3)
Where the inputs sent for job work are not received back by the principal after completion of job work or otherwise or are not supplied from the place of business of the job worker in accordance with clause (a) or clause (b) of sub-section (1) of section 143 within one year of being sent out, it shall be deemed that such inputs had been supplied by the principal to the job worker on the day when the said inputs were sent out:
Provided that where the inputs are sent directly to a job worker, the period of one year shall be counted from the date of receipt of inputs by the job worker.
Section 19(1): Allowance of Input Tax Credit for Job Work
The principal, under conditions and restrictions as prescribed, is permitted to claim input tax credit for inputs sent to a job worker for job work.
Section 19(2): Direct Credit for Inputs Sent to Job Worker
Contrary to the provisions in clause (b) of sub-section (2) of section 19, the principal has the right to claim input tax credit on inputs, even if these inputs are directly sent to a job worker for job work without first being brought to the principal's place of business.
Section 19(3): Deemed Supply if Inputs Not Returned
In cases where the inputs sent for job work are not returned to the principal within one year of being sent out, after completion of job work or otherwise, or are not supplied from the job worker's place of business in accordance with section 143, it will be considered that the principal supplied these inputs to the job worker on the day they were sent out. The one-year period is calculated from the date of receipt of inputs by the job worker when sent directly to them.
Section 19(4)
The principal shall, subject to such conditions and restrictions as may be prescribed, be allowed input tax credit on capital goods sent to a job worker for job work.
Section 19(5)
Notwithstanding anything contained in clause (b) of sub-section (2) of section 19, the principal shall be entitled to take credit of input tax on capital goods even if the capital goods are directly sent to a job worker for job work without being first brought to his place of business.
Section 19(4): Allowance of Input Tax Credit
The principal, under conditions and restrictions as prescribed, is permitted to claim input tax credit on capital goods dispatched to a job worker for job work.
Section 19(5): Direct Credit for Capital Goods at Job Worker's Location
Contrary to the provisions in clause (b) of sub-section (2) of section 19, the principal retains the right to avail input tax credit on capital goods, even if these goods are sent directly to a job worker for job work without initially being brought to the principal's place of business.
Efficient Management of Input Tax Credit for Capital Goods
In the realm of Goods and Services Tax (GST), Sections 19(4) and 19(5) provide crucial provisions regarding the input tax credit associated with capital goods sent for job work. These provisions are designed to streamline the process and ensure that businesses can effectively manage their tax credits in scenarios involving job work. The flexibility granted in Section 19(5) acknowledges the practical aspects of business operations, allowing for a smoother flow of processes related to job work without compromising on the entitlement to input tax credits.
Section 19(6)
Where the capital goods sent for job work are not received back by the principal within a period of three years of being sent out, it shall be deemed that such capital goods had been supplied by the principal to the job worker on the day when the said capital goods were sent out:
Provided that where the capital goods are sent directly to a job worker, the period of three years shall be counted from the date of receipt of capital goods by the job worker.
Section 19(7)
Nothing contained in sub-section (3) or sub-section (6) shall apply to moulds and dies, jigs and fixtures, or tools sent out to a job worker for job work.
Explanation.—For the purpose of this section, "principal" means the person referred to in section 143.
Capital Goods in Job Work
When capital goods are dispatched for job work and aren't returned to the principal within three years from the date of dispatch, it will be considered that the principal supplied those capital goods to the job worker on the day they were sent out. However, if the capital goods are sent directly to a job worker, the three-year period is calculated from the date the job worker receives them.
Exception for Certain Items
The rules mentioned in sub-section (3) or sub-section (6) do not apply to moulds and dies, jigs and fixtures, or tools sent to a job worker for job work.
Explanation: For the purpose of this section, "principal" refers to the person mentioned in section 143.