Rule 16A

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C.A. LINESH PATIL (Querist)
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23 October 2010 Can we send consumable tools, consumable oil to job worker for machining purpose on 57f4? If yes is their any notification to this effect?
As the tools are consumable they will not received back with material. Then how can we clear the challan?

can we send as per Rule 16A.
and clarify me also AS per 16A we can sent input to job worker.and surely input in the same form would not be returned.
further AS per Rule 4(5) of CCR 2004,input must be returned within 180 days.otherwise credit taken will be reversed.
but how input will be returned as it would be consumed.

Thanks in advance

Madhukar N Hiregange

Madhukar N Hiregange (Expert)
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24 October 2010 The challan is under rules 4 (5) (a) and for cosumables/ tools would be closed on the consumption at the JW premises which can be recorded as such in your records.

C.A. LINESH PATIL

C.A. LINESH PATIL (Querist)
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24 October 2010 sir so much thanks for your reply
but sir can you u plz clarify me in some simple words.as i could not understand the language properly.

Thanks

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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22 July 2025 Sure! Let me explain Rule 16A and your situation in simpler terms:

Your question:
You want to send consumable tools and consumable oil to a job worker for machining.

Consumables will be used up and not returned.

You want to know if you can send these under challan Form 57F4 as per Rule 16A.

You are also worried because Rule 4(5) of CCR 2004 says inputs sent to job worker must be returned within 180 days, or else the credit taken has to be reversed.

How does this work if consumables are consumed and not returned?

Simple Explanation:
Yes, you can send consumable tools and oils to the job worker under the challan as inputs.

Consumables are special because they are used up at the job worker’s place and not returned.

For consumables and tools that get consumed, you do not have to wait for their physical return to your factory.

Instead, you record the consumption at the job worker’s end in your records to show they are consumed.

This means, as per Rule 4(5), although inputs are supposed to be returned within 180 days, consumables/tools are an exception because they can't be returned physically.

So, you close the challan for these consumables in your books showing they were consumed, and no reversal of credit is required.

Summary:
You can send consumables/tools under Form 57F4.

Record consumption at job worker’s place.

No need to wait for physical return of consumables.

Keep proper records to prove consumption.

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