M/s. Global Machines Pvt. Ltd., an importer based in Chennai, imported a consignment of specialized steel rods in May, 2025 for manufacturing…

CA Final · Indirect Tax Laws · RTP · January 2026
M/s. Global Machines Pvt. Ltd., an importer based in Chennai, imported a consignment of specialized steel rods in May, 2025 for manufacturing high-precision auto parts. Since the company does not have the required machinery for cutting and shaping, it sent these rods to a local job worker, M/s. Sharp Tools & Co. same day under a delivery challan and e-way bill, mentioning the description and quantity of rods. The job worker maintains records of receipt, the processes carried out and the scrap generated. However, due to delays in production schedules, the rods remain with the job worker till June, 2026. Upon inspection by the jurisdictional Customs Officer, the importer is unable to establish proper utilization of some of the rods as per the particulars furnished earlier. Based on the above-mentioned information furnished by M/s. Global Machines Pvt. Ltd., you are required to answer the following questions based on the Customs (Import of Goods at Concessional Rate of Duty or for Specified Purposes) Rules, 2022 as amended: (a) What is the maximum time limit for which the goods can be sent to the job worker? Has Global Machines Pvt. Ltd. complied with this requirement? (b) Discuss whether the importer shall be responsible for ensuring that the said goods are used in accordance with the purposes provided in the aforesaid rules? (c) What record-keeping responsibilities does the job worker - Sharp Tools & Co. - have in this case? (d) If part of the processed rods needs to be sent to another job worker for further finishing, which document must accompany such movement of goods?

Suggested Answer and Working Notes:

(a) In accordance with Rule 7 of the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022, the maximum period for which the goods can be sent to the job worker is one year from the date of invoice or electronic way bill. Since the rods remained with the job worker, M/s. Sharp Tools & Co. beyond one year, the Global Machines Pvt. Ltd. has not complied with the requirement. (b) Yes, importer shall be responsible for ensuring that the said goods are used in accordance with the purposes prescribed in the rules and in the event of failure to do so, the jurisdictional Customs Officer would take necessary action against the importer prescribed under rules 11 & 12 of the Customs (Import of Goods at Concessional Rate of Duty or for Specified Purposes) Rules, 2022. (c) The job worker - Sharp Tools & Co.- have following record-keeping responsibilities in this case- i. It shall maintain an account of receipt of goods, manufacturing process undertaken thereon and the waste generated, if any, during such process; and ii. It shall produce the account details before the jurisdictional Customs Officer as and when required by the said officer. (d) If part of the processed rods needs to be sent to another job worker for further finishing, the processed goods must move under the cover of an invoice or an electronic way bill.

Topics: Job Work

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