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

Input tax credit on jobwork allows principals to claim credit for inputs and capital goods, subject to deemed-supply rules.

Principals may claim input tax credit on inputs and capital goods sent to a jobworker, including when sent directly to the jobworker, subject to prescribed conditions. Where such inputs or capital goods are not returned or supplied from the jobworker's place of business within the applicable statutory period, they are deemed to have been supplied by the principal on the date of dispatch; the counting of the statutory period runs from the jobworker's date of receipt when goods are sent directly. Exempted from the deemed-supply rules are moulds and dies, jigs and fixtures, and tools.