Input tax credit on job-work: principal may claim credit for inputs and capital goods sent directly; deemed supply rules apply.

The statute permits the principal, subject to prescribed conditions, to claim input tax credit on inputs and on capital goods sent to a job-worker for job-work, including when such goods are sent directly to the job-worker. Inputs not returned or supplied from the job-worker's premises within one year of dispatch (counted from the job-worker's receipt if sent directly) are deemed supplied by the principal; capital goods not returned within three years are similarly deemed supplied. Moulds and dies, jigs and fixtures, and tools are excluded from the deemed-supply rule. "Principal" is as defined in the job-work provisions.

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