Section 142 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
The longest section in Chapter XX, dealing with everything that straddled 1 July 2017. Its sub-sections are still cited, because appeals and refunds under the existing law take a long time to finish.
Section 142 groups into four kinds of situation: goods and price adjustments across the appointed day — returned goods, price revisions upward and downward, goods sent on approval; existing-law proceedings — refund claims, appeals, revisions, and recovery of arrears, each disposed of under the existing law with the outcome flowing into GST in a stated way; credits and debits; and straddling supplies, where part of the consideration or the supply fell on either side of the appointed day. Section 141 deals separately with job work, allowing inputs, semi-finished and finished goods removed before the appointed day to be returned within the prescribed period without tax.
Group one: goods and price adjustments across the appointed day
Returned goods. Goods on which duty or tax was paid under the existing law, removed not earlier than six months before the appointed day, and returned within six months after it, are dealt with by the section rather than by the ordinary credit-note machinery — with the treatment turning on whether the person returning them is registered and on the timing.
Price revisions. Where the price of a supply made under the existing law is revised upward after the appointed day, a supplementary invoice or debit note is issued within thirty days of the revision, and it is deemed to have been issued in respect of an outward supply made under this Act. Where the price is revised downward, a credit note may be issued within thirty days, and the person may reduce his tax liability only if the recipient has reduced his input tax credit correspondingly.
Goods sent on approval. Goods sent on approval not earlier than six months before the appointed day and returned within the prescribed period after it are dealt with expressly, with a consequence where they are not returned within the period.
Why they still matter: the arithmetic of these adjustments appears in reconciliations for the transition year, and a difference between the books and the returns for FY 2017-18 is frequently traceable to one of them.
Group two: existing-law proceedings, and where the outcome goes
This is the group that is still live, because appeals under the existing law are still being decided.
The pattern is consistent across the sub-sections:
- the proceeding — a refund claim, an appeal, a revision, an assessment or adjudication, or a recovery — is disposed of in accordance with the existing law;
- and the outcome then flows into GST in a stated way.
For amounts found refundable: the amount is paid in cash, notwithstanding anything in the existing law other than the unjust enrichment provision — and where the claim is rejected, the amount lapses.
For amounts found recoverable: the amount is recovered as an arrear of tax under this Act, and — importantly — the amount so recovered shall not be admissible as input tax credit under this Act.
Those two rules are the practical core of the group, and they produce two consequences worth knowing:
A favourable existing-law outcome produces cash, not credit. So a service tax or excise refund succeeding today is paid out, not credited to the electronic credit ledger.
An adverse existing-law outcome produces a GST arrear with no credit. The amount is recovered under the GST recovery machinery — s.79 and Rules 143 to 157 — but it does not generate an input tax credit. Section 78 and 79 →
Group three: credits and debits
Where a credit note or debit note is issued after the appointed day in respect of a supply made before it, the section fixes the treatment — including the conditions on which a downward revision reduces the supplier's liability, which turn on the recipient's corresponding credit reduction.
The recurring practical point: a reduction in the supplier's liability is not unilateral. Both here and under s.15(3)(b) for post-supply discounts, the recipient's reversal is a condition. That symmetry runs through the Act, and it is why a credit note issued without securing the recipient's reversal does not achieve what it appears to. Post-supply discounts →
Group four: straddling supplies
Where a supply was partly performed or partly paid for before the appointed day and partly after, the section allocates the tax between the existing law and GST.
The governing idea: tax is not payable under this Act to the extent that tax was leviable under the existing law on that part.
Where this still arises: long-duration contracts entered into before the appointed day — construction, works contracts, annual maintenance, licences — where the reconciliation for the transition period still has to be explained in an audit.
Section 141: job work across the appointed day
Section 141 allows inputs, semi-finished goods and finished goods removed to a job worker before the appointed day, and returned within six months of it — extendable by the Commissioner by a further two months — to be returned without payment of tax.
The conditions:
- the goods must be returned within the period; failing which, input tax credit shall be recovered in accordance with the section;
- a declaration of the goods held by the job worker must have been filed by the principal and the job worker in the prescribed form and period.
Where the finished goods are removed from the job worker's premises on payment of tax within India, or exported, the section provides for it expressly.
The parallel with the ongoing regime is worth noting: s.143 applies the same architecture to job work generally, with one year for inputs and three years for capital goods, and ITC-04 as the intimation. Job work under GST →
Why Chapter XX still appears in current work
Three reasons.
Existing-law appeals are still being decided, and each outcome flows into GST under the s.142 rules — cash if refundable, an arrear with no credit if recoverable.
FY 2017-18 demands are still being made, because the s.73(10) limitation for that year was extended by s.168A notifications. Sections 168 and 168A →
And s.128A covers the period. For a s.73 demand relating to 1 July 2017 to 31 March 2020, paying the tax alone waives interest and penalty — which for a transition-period demand is usually the answer worth taking. Section 128A →
Key takeaways
- Section 142 covers goods and price adjustments across the appointed day, existing-law proceedings, credits and debits, and straddling supplies.
- Existing-law proceedings are disposed of under the existing law, with the outcome flowing into GST.
- An amount found refundable is paid in cash; a rejected claim lapses.
- An amount found recoverable is an arrear under this Act, and is not admissible as input tax credit.
- A downward price revision reduces the supplier's liability only where the recipient reduces his credit.
- Section 141 allows job work goods returned within six months, extendable by two, without tax.
Read next
- Section 140: Transitional Credit, and Where It Stands Now
- Sections 168 and 168A: Circulars, and the Power to Extend Time
- Section 128A and Rule 164: The SPL Forms, Step by Step
- Post-Supply Discounts: Section 15(3)(b) and the Finance Act 2026
Disclaimer: Positions stated as on 5 September 2026, based on the CGST Act as amended to 31 March 2026 (ICAI Bare Law, 12th edition). Section 142 contains numerous sub-sections with specific conditions; the applicable sub-section should be read in full for any particular transaction.