No tax will be payable by the manufacturer or the job worker :
Shall a manufacturer or a job worker become liable to pay tax if the inputs or semi-finished goods sent for job work under the existing law are returned after completion of job work after the appointed day?
Ans. No tax will be payable by the manufacturer or the job worker under the following circumstances: –
(i) Inputs/ semi-finished goods are sent to the job worker in accordance with the provisions of the existing law before the appointed day.
(ii) The job worker returns the same within six months from the appointed day (or within the extended period of maximum two months).
(iii) Both the manufacturer and the job worker declare the details of inputs held in stock by the job worker on the appointed day in the prescribed form.
The relevant sections are 141(1), 141(2) & 141 (4).
However, if the said inputs/semi- finished goods are not returned within six months (or within the extended
period of maximum two months), the input tax credit availed is liable to be recovered.