Chapter VIII - Transitional provisions
Section 19
Section 19: Transitional provisions relating to job work
Section 19 dealt with inputs, semi-finished goods and other goods sent out before the appointed day for job work, manufacturing processes or testing. No UTGST was payable when they came back within six months of the appointed day (extendable by two months), provided the sender and job worker declared the stock held on the appointed day as prescribed.
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This article is for general information. Refer to the Union Territory Goods and Services Tax Act, 2017 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) Where any inputs received at a place of business had been desptached as such or desptached after being partially processed to a job worker for further processing, testing, repair, reconditioning or any other purpose in accordance with the provisions of existing law prior to the appointed day and such inputs are returned to the said place on or after the appointed day, no tax shall be payable if such inputs, after completion of the job work or otherwise, are returned to the said place within six months from the appointed day:
Provided that the period of six months may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding two months:
Provided further that if such inputs are not returned within a period of six months or the extended period from the appointed day, the input tax credit shall be liable to be recovered in accordance with the provisions of clause (a) of sub-section (8) of section 142 of the Central Goods and Services Tax Act.
(2) Where any semi-finished goods had been despatched from any place of business to any other premises for carrying out certain manufacturing processes in accordance with the provisions of existing law prior to the appointed day and such goods (hereinafter in this section referred to as "the said goods") are returned to the said place on or after the appointed day, no tax shall be payable if the said goods, after undergoing manufacturing processes or otherwise, are returned to the said place within six months from the appointed day:
Provided that the period of six months may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding two months:
Provided further that if the said goods are not returned within a period specified in this sub-section, the input tax credit shall be liable to be recovered in accordance with the provisions of clause (a) of sub-section (8) of section 142 of the Central Goods and Services Tax Act:
Provided also that the person despatching the goods may, in accordance with the provisions of the existing law, transfer the said goods to the premises of any registered person for the purpose of supplying therefrom on payment of tax in India or without payment of tax for exports within six months or the extended period, as the case may be, from the appointed day.
(3) Where any goods had been despatched from the place of business without payment of tax for carrying out tests or any other process to any other premises, whether registered or not, in accordance with the provisions of existing law prior to the appointed day and such goods are returned to the said place of business on or after the appointed day, no tax shall be payable if the said goods, after undergoing tests or any other process, are returned to such place within six months from the appointed day:
Provided that the period of six months may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding two months:
Provided further that if the said goods are not returned within the period specified in this sub-section, the input tax credit shall be liable to be recovered in accordance with the provisions of clause (a) of sub-section (8) of section 142 of the Central Goods and Services Tax Act:
Provided also that the person despatching the goods may, in accordance with the provisions of the existing law, transfer the said goods from the said other premises on payment of tax in India or without payment of tax for exports within six months or the extended period, as the case may be, from the appointed day.
(4) The tax under sub-sections (1), (2) and (3) shall not be payable only if the person despatching the goods and the job worker declare the details of the inputs or goods held in stock by the job worker on behalf of the said person on the appointed day in such form and manner and within such time as may be prescribed.
Introduction
Sections 18 to 20 came into force on 1 July 2017 under Notification No. 3/2017-Union Territory Tax (Section 17 on 22 June 2017 under Notification No. 1/2017-Union Territory Tax). Their practical relevance today is mainly to legacy claims, assessments and disputes from the move to GST.
Key takeaways
Six-month return window
Goods returned within six months from the appointed day attract no tax; the Commissioner may extend the period by up to two months for sufficient cause.
Credit recovery if not returned
If inputs or goods are not returned in time, input tax credit is recoverable under CGST section 142(8)(a).
Declaration is a condition
Sub-section (4): the exemption applies only if the sender and job worker declare the details of stock held by the job worker on the appointed day, in the prescribed form, manner and time.
Three categories of goods
Sub-section (1) covers inputs sent to a job worker, as such or partly processed. Sub-section (2) covers semi-finished goods sent for manufacturing processes. Sub-section (3) covers goods sent without payment of tax for tests or other processes.
In each case the goods must have been despatched under the existing law before the appointed day and returned on or after it.
Time limits and consequences
The return period is six months from the appointed day, extendable by up to two months. For semi-finished goods and goods sent for testing, the sender could also transfer the goods, under the existing law, for supply on payment of tax in India or for export without payment of tax within the same period.
If goods are not returned in time, the credit is recoverable under clause (a) of CGST section 142(8).
Practical checklist
Do
- In a legacy dispute, produce the stock declaration filed under Section 19(4) together with despatch and return records.
Frequently asked questions
What if the stock declaration was not filed?
Sub-section (4) says the tax under sub-sections (1) to (3) is not payable only if the declaration was made. Without it, the exemption condition is not met.
Need help applying this provision to your situation?
Contact BizeneedLast updated 11 October 2026