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1. Where any inputs 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:

The period of six months may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding two months

2. if such inputs are not returned within the aforesaid period, the input tax credit shall be liable to be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act.

3. 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 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:

4. Provided further that if the said goods are not returned within the period specified in this subsection, the input tax credit shall be liable to be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act.

5. 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 there from on payment of tax in India or without payment of tax for exports within the aforesaid period specified in this subsection.

6. 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.

7. Provided further that if the said goods are not returned within the period specified in this subsection, the input tax credit shall be liable to be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act. 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 subsection.

8. The tax mentioned above 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. Every person to whom above provisions applicable, within ninety days of the appointed day, submit a declaration electronically in FORM GST TRAN-1, specifying therein, the stock of the inputs, semi-finished goods or finished goods, as applicable, held by him on the appointed day.

9. Provision in Current Laws - As per provision in Central Excise law, Cenvat Credit is allowed on such inputs sent to job worker for further processing and not required to be reversed goods returned back within 6 months or removed from premises of job worker if the exemption has been claimed under Notification No. 214-86- CE. The benefit in GST Law-Now existing taxpayers can obtain the benefit of transition and as per GST law, those 6 months shall be counted from appointed date. This is the big relief for Principal Manufacturer who gets job work done on their inputs.

10. Tax will be payable by the job worker on the said goods if they are not returned to the place of business of the manufacturer within six months (or within the extended period of maximum two months) from the appointed day. Further, the input tax credit enjoyed by the manufacturer will liable to be recovered if the aforesaid goods are not returned.


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Category GST, Other Articles by - CA Varun Chadha 



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