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CGST Act Section 19: Taking input tax credit in respect of inputs and capital goods sent for job work | Finin2min

Section 19 - Taking input tax credit in respect of inputs and capital goods sent for job work

Chapter V - Input Tax Credit
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Source control: The text/status on this page is tied to the official source gateway and the Phase 1 legal-review register. Open official source.

Finin2min Summary - Section in 2 Minutes

Permits principal’s ITC on goods/capital goods sent directly or indirectly to job workers, with deemed-supply consequences if not returned/supplied in time. Inputs may be sent directly to job worker without first reaching principal. Inputs: one-year return/supply window. Capital goods: three-year window. Moulds, dies, jigs, fixtures and tools are excluded from deemed-supply time consequence. Challan and FORM GST ITC-04 controls apply.

Exact operative text

19. Taking input tax credit in respect of inputs and capital goods sent for job work.-(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. (2) Notwithstanding anything contained in clause (b) of sub-section (2) of section 16, 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. (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. (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. (5) Notwithstanding anything contained in clause (b) of sub-section (2) of section 16, 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. (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. (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.

Paragraph-wise decode

Permits principal’s ITC on goods/capital goods sent directly or indirectly to job workers, with deemed-supply consequences if not returned/supplied in time. Inputs may be sent directly to job worker without first reaching principal. Inputs: one-year return/supply window. Capital goods: three-year window. Moulds, dies, jigs, fixtures and tools are excluded from deemed-supply time consequence. Challan and FORM GST ITC-04 controls apply.

Section-Rule-Form-Notification bridge

No direct Rule certified in Phase 1. Check notifications, circulars, forms and corresponding State law.

The mapping is a legal concordance, not a round-robin related-link list. It is limited to instruments certified in this phase.

Practical example

Inputs sent directly to a job worker are not returned within one year and are not supplied from the job worker’s premises. They are deemed supplied by the principal from the original dispatch date. PROFESSIONAL ALERT Track challan-wise ageing, not only aggregate inventory.

Professional alert

Confirm the transaction-date amendment and commencement position before reliance.

Implementation checklist

  1. Fix the transaction, taxable period and jurisdiction.
  2. Read every subsection, proviso, explanation and omission marker.
  3. Open the mapped Rule, form, notification and circular.
  4. Test State/UT variation and portal version.
  5. Preserve evidence, approvals, working papers and acknowledgements.
  6. Record the conclusion, assumptions, source date and reviewer.

Evidence and retention checklist

Practical Q&A

What does section 19 regulate?
It regulates taking input tax credit in respect of inputs and capital goods sent for job work. Read the exact text, conditions, exceptions and transaction date together.
Which subordinate law should be checked?
No direct CGST Rule has been certified in this phase. Notifications, circulars, forms and the corresponding SGST/UTGST layer may also apply.
What evidence should be retained?
Preserve the contract or transaction record, invoice or form, portal acknowledgement, payment/ledger evidence, correspondence, legal working and the official source version used.
Can portal behaviour override the statute?
No. Portal functionality is operational evidence; legal entitlement and liability remain controlled by the Act, Rules, notifications and binding decisions.
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