GST on Moulds and Dies under Job Work
There was confusion about the taxability of moulds and dies sent by the principal to his job worker free of cost, based on earlier tax laws. In order to clarify the doubt and tax department issued a Circular (No.47/21/2018-GST dated 8 th June 2018). We shall discuss the same here: Moulds and dies belong to the Principal Moulds and dies belong to the Job worker Moulds and dies belong to the Principal When the moulds and dies belong to the principal who either purchased or manufactured it by own and the same is sent to job worker, it is not considered as supply based on the following: Moulds and dies sent for free of cost, there is no consideration is involved in the transaction The principal and the job worker are not related persons or distinct persons Reversal of Input tax credit There is no requirement of reversal of input tax credit taken on such moulds and dies purchased by the principal as the moulds and dies are provided on free of cost in the course or furth