Key points
- Job work: goods sent before GST could come back without tax within six months (extendable by two).
- Goods returned: duty-paid goods returned within six months could get a refund under the old law.
- Price revisions: supplementary invoices or credit notes had to be issued within 30 days.
- Goods on approval: goods sent before GST and returned within six months were not taxed.
- The 2017 transition windows are closed. This guide is for understanding old records, assessments and disputes, and for lessons that still apply when tax rules change.
Job work (Section 141)
Manufacturers often send inputs, semi-finished goods or finished goods to job workers. If goods were sent under the old law before 1 July 2017 and returned on or after that date, no tax was payable on their return if they came back within six months. The period could be extended by up to two months for good reason. If the goods didn’t come back in time, credit could be recovered. Both the sender and job worker had to declare the goods held.
Goods returned by customers (Section 142(1))
If goods sold up to six months before GST, with duty or tax paid, were returned after 1 July 2017 within six months of the appointed day, the seller could claim a refund of the old duty, provided the goods could be identified. If the customer was registered under GST, the return was treated as a supply by them.
Price revisions (Section 142(2))
If a contract made before GST was revised after 1 July 2017, the seller had to issue a supplementary invoice or debit note (for an increase) or a credit note (for a reduction) within 30 days of the revision. These were treated as issued under GST.
Pending refunds and appeals (Section 142(3)–(8))
- Refund claims filed before or after GST for amounts under the old law were decided under the old law and paid in cash.
- Appeals, revisions and reviews about the old law continued under that law, with any amount found due recovered or refunded accordingly.
- Assessments of the old law periods continued under the old law.
Long-term contracts (Section 142(10))
Goods or services supplied on or after 1 July 2017 under contracts signed earlier were taxed under GST. For works contracts and other long-running agreements, this meant splitting supplies by date and making sure tax was not paid twice on the same value.
Tax paid in advance under the old law (Section 142(11))
Where VAT or service tax had already been paid on an advance or part of a supply under the old law, that tax could be taken as credit to avoid double taxation when the same supply became taxable under GST.
Goods sent on approval (Section 142(12))
Goods sent on approval up to six months before GST and returned within six months of the appointed day were not taxed. If they were not returned in time, the person who had them had to pay tax if they were liable.
A worked example: goods out for job work
Suppose a furniture maker sent 500 cut steel sheets to a job worker for powder coating on 25 June 2017, under the old excise rules. GST started on 1 July 2017.
- Declare the goods Both the manufacturer and the job worker declared the goods held with the job worker in the transition forms.
- Return within six months The coated sheets came back on 10 October 2017, well within six months, so no tax was payable on their return.
- If they had come back late Had they not come back within six months (or the extended period), the credit taken on those inputs could have been recovered.
Today’s GST job work rules work in a similar way, but with longer time limits: one year for inputs and three years for capital goods such as moulds and dies.
Summary table
| Situation | Section | Time limit | Outcome |
|---|---|---|---|
| Goods out for job work | 141 | 6 months (+2) | No tax on return in time |
| Goods returned by customer | 142(1) | 6 months | Refund of old duty |
| Price revision | 142(2) | 30 days | Supplementary invoice or credit note |
| Pending refunds and appeals | 142(3)–(8) | As per old law | Decided under old law |
| Long-term contracts | 142(10) | Supplies after GST | Taxed under GST |
| Goods on approval | 142(12) | 6 months | No tax if returned in time |
The 2017 transition windows are closed. This guide is for understanding old records, assessments and disputes, and for lessons that still apply when tax rules change.
Why these rules still matter
Many of these situations were later checked in assessments, and some led to disputes. The same ideas also return whenever tax rules change: what to do with goods out for job work, returns of goods sold before the change, and contracts that span the change date. Today’s job work rules, for example, still use time limits of one year for inputs and three years for capital goods. See our GST manufacturing guide.
This guide explains GST rules in simple words and reflects the law as we understand it on 28 October 2026. Rules, rates and dates change, so please confirm with your CA or the official notifications before acting on it.