Piyush Manufactures, a registered person, instructs its supplier to send the capital goods directly, to Vijay Enterprises, who is a job-worker, outside its factory premises for carrying out certain operations on the good

As per section 19(5) of the Central Goods and Services Tax Act, 2017: Notwithstanding anything contained in 16(2)(b), 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 Further, section 19(6) of the Central Goods and Services Tax Act, 2017 stipulates that where the capital goods sent directly to a job worker are not received back by the principal within a period of 3 years of the date of receipt of capital goods by the job worker, 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 received by the job worker. In view of aforementioned provisions, Piyush Manufactures are eligible to retain the input tax credit availed by them on the capital goods. However, if the capital goods are not returned by Vijay Enterprises within 3 years from 15th April and Piyush Manufactures shall be liable to pay the tax along with applicable interest. There is no time limit for return of moulds and dies, jigs and fixtures or tools sent out to a job worker for job work [section 19(7) of Central Goods and Services Tax Act, 2017]. However, if Vijay Enterprises does not return the jigs and fixtures to Piyush Manufactures, it shall not be considered as a supply of jigs and fixtures to Vijay Manufactures by Piyush Manufactures. In this case also, Vijay Manufactures will be eligible to retain the input tax credit availed by them.