Section 19 keeps credit with a principal who sends goods out for processing. The principal takes credit even if the goods go straight from the supplier to the job worker, but must bring them back, or supply them from the job worker's premises, within a time limit — or treat them as supplied.
Key points
- Under section 19 of the CGST Act, 2017 a principal may take credit on inputs and capital goods sent to a job worker, including those sent directly by the supplier to the job worker.
- Inputs not returned within one year (capital goods within three years) of being sent out are deemed supplied by the principal to the job worker on the day they were sent.
- Moulds, dies, jigs, fixtures and tools are outside the deemed-supply rule (section 19(7)).
The provisions
19(1)–(3)Inputs
Statutory text
(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.
*Enforced w.e.f. 1st July, 2017.
19(4)–(7)Capital goods
Statutory text
(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.
What it means
The same scheme for capital goods with a three-year limit. Moulds and dies, jigs and fixtures, and tools are excluded from the deemed-supply rule, since they commonly stay with the job worker. Movements are reported in Form GST ITC-04 (Rule 45).
Statutory text as published on the CBIC tax information portal, as on 03.10.2026; the numbered notes record each amendment. Official source
Common questions
- How long can goods remain with a job worker without GST?
- One year for inputs and three years for capital goods, after which they are deemed supplied to the job worker (section 19 CGST); moulds, dies, jigs, fixtures and tools are excluded.
Commentary and case notes checked against the judgments and CBIC sources on 04.10.2026.
What it means
Sub-section (2) overrides the receipt condition in section 16(2)(b), so credit is available on inputs sent straight to the job worker. If they are neither brought back nor supplied from the job worker's premises under section 143 within one year, they are deemed supplied on the day they were sent (or received by the job worker, if sent directly), and tax is payable with interest.