Job-Work Under GST
By: – Praveen Nair
Goods and Services Tax – GST
Dated:- 21-2-2018
Introduction Job-work sector constitutes a significant industry in Indian economy. It includes outsourced activities that may or may not culminate into manufacture. The term Job-work itself explains the meaning. It is processing of goods supplied by the principal. The concept of job-work already exists in Central Excise, wherein a principal manufacturer can send inputs or semi-finished goods to a job worker for further processing. Many facilities, procedural concessions have been given to the job workers as well as the principal supplier who sends goods for job-work. The whole idea is to make the principal responsible for meeting compliances on behalf of the job-worker on the goods processed by him (job-worker), considering the fact that typically the job-workers are small persons who are unable to comply with the discrete provisions of the law. The GST Act makes special provisions with
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pletion of job-work bring back such goods without payment of tax. The principal is not required to reverse the ITC availed on inputs or capital goods dispatched to job-worker.
* Principal can send inputs or capital goods directly to the job-worker without bringing them to his premises and can still avail the credit of tax paid on such inputs or capital goods.
* However, inputs and/or capital goods sent to a jobworker are required to be returned to the principal within 1 year and 3 years, respectively, from the date of sending such goods to the job-worker.
* After processing of goods, the job-worker may clear the goods to;
* Another job-worker for further processing
* Dispatch the goods to any of the place of business of the principal without payment of tax
* Remove the goods on payment of tax within India or without payment of tax for export outside India on fulfilment of conditions.
The facility of supply of goods by the principal to the third party directly from the
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ule 10 of the Invoice Rules. The responsibility for keeping proper accounts for the inputs or capital goods shall lie with the principal.
Accounts & records
The responsibility for keeping proper accounts for the inputs or capital goods shall lie with the principal.
Challan
* All goods sent for job work must be accompanied by a challan.
* The challan will be issued by the principal.
* It will be issued even for the inputs or capital goods sent directly to the job-worker.
* The details of challans must be shown in FORM GSTR-1.
* Details of challans must also be filed through Form GST ITC-04.
The challan issued must include the following particulars:
* Date and number of the delivery challan
* Name, address and GSTIN of the consigner and consignee
* HSN code, description and quantity of goods
* Taxable value, tax rate, tax amount- CGST, SGST, IGST, UTGST separately
* Place of supply and signature
Input Tax credit on goods supplied to job worker
Section 19 of the
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quarter. He must include the details of challans in respect of the following-
* Goods dispatched to a job worker or
* Received from a job worker or
* Sent from one job worker to another
It must be furnished on or before 25th day of the month succeeding the quarter. For example, for Oct-Dec quarter, the due date is 25th Jan.
Extended meaning of input
As per the explanation provided in Section 143 of the CGST Act, 2017, where certain process is carried out on the input before removal of the same to the jobworker, such product after carrying out the process is to be referred as the intermediate product. Such intermediate product can also be removed without the payment of tax. Therefore, both input and intermediate product can be cleared without payment of duty to job-worker.
Waste clearing provisions
Pursuant to Section 143 (5) of the CGST Act, 2017, waste generated at the premises of the job-worker may be supplied directly by the registered job-worker from his place of busin
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