Page 26 - GSTL_3rd September 2020_Vol 40_Part 1

J8 GST LAW TIMES [ Vol. 40
• The definition touches another law and procedures, that is to say,
Accounting Standards as prescribed by Institute of Chartered Ac-
countants of India for understanding about determination of capi-
talizing the value of goods and its associated aspects.
• On plain reading of AS-10 (Accounting Standards for Property,
Plant, Equipment), it is mentioned that Recognition of property,
plant and equipment has to be applied to specific circumstances of
an enterprise.
• With regard to insignificant values, it is given that, it may be aggre-
gated and then recognition may be carried out. Insignificant values
are referred to the values of “moulds, tools and dies”.
• Added to this, it says, an enterprise may decide to expense an item
which could otherwise have been included as property, plant and
equipment, because the amount of the expenditure is not material.
• Thus, it is amply clear that as the values of “moulds, tools and dies”
are insignificant and can be treated as an “expense”, and thus CGST
Act, has excluded moulds, tools and dies from the heading capital
goods.
Section 143 : CGST Act
• This is evident from Section 143(1), wherein the term “capital
goods” is alone mentioned.
• Whereas, Section 143(1)(a), contains the word “other than moulds
and dies, jigs and fixtures, or tools“ as a prefix to “capital goods”.
• This phrase is given, while bringing back the goods only and not in-
cluded in Section 143(1) at the time of sending it to job worker.
• The extract is shown hereunder :
“143. (1) A registered person (hereafter in this section referred to as
the “principal”) may under intimation and subject to such conditions
as may be prescribed, send any inputs or capital goods, without
payment of tax, to a job worker for job work and from there subse-
quently send to another job worker and likewise, and shall, -
(a) bring back inputs, after completion of job work or otherwise,
or capital goods, other than moulds and dies, jigs and fixtures, or
tools, within one year and three years, respectively, of their being
sent out, to any of his place of business, without payment of tax”
• In nutshell, clarification is required in these aspects :
(a) Whether moulds and dies, jigs and fixtures, or tools can be
sent for job work purpose?
(b) Why moulds and dies, jigs and fixtures, or tools have been
used in exceptional clause in Section 143(1)(a)? [Not in Sec-
tion 143(1)]
(c) Does it mean that moulds and dies, jigs and fixtures, or tools
be classified under Input category?
Section 19 : CGST Act
• Section 19(7) of CGST Act, 2017 emphasizes the return of inputs and
capital goods, from the job worker’s premises after 1 year or 3 years,
only by excluding moulds and dies, jigs and fixtures or tools.
[Continued on page J16]
GST LAW TIMES  3rd September 2020  42