Goods and Services Tax – GST – By: – CA Akash Phophalia – Dated:- 24-5-2018 – (1) Introduction: Businesses run on core competencies. It is the fundamental principle of management that business must run efficiently. The specialization and efficiency has resulted in increase in job work for manufacturers. In this article we will deal with the situation of admissibility of input tax credit on inputs sent to a job worker. (2) Meaning of relevant terms: Job work – Section2(68) of CGST Act 2017 defines the term as – job-work means any treatment or process undertaken by a person on goods belonging to another registered person and the expression job worker shall be construed accordingly. Thus where any person performs any process or treatment on good belonging to the other person then such first mentioned person shall be called as job worker and the treatment or process so undertaken is construed as job-work. Principal- The term principal is not directly defined under the law. However, it sim
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principal, without being physically received by the principal at its place of business, then also it shall be presumed that the goods are received by the principal and the input tax credit shall be admissible. Further, it is essential to note that where the inputs sent for job-work are not received back by the principal after completion of job-work or otherwise or are not supplied from the place of business of the job worker within one year of being sent out, it shall be deemed that such inputs had been supplied by the principal to the job-worker on the day when the said inputs were sent out and the tax liability shall accrue from such date. However, the period of one year in case where the inputs are sent directly to a job-worker, the period of one year shall be counted from the date of receipts of inputs by the job-worker. (4) Whether credit is admissible on capital goods sent to job-worker: The conditions regarding availment of input tax credit on capital goods are similar to the c
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rvice Tax Identification Number or Unique Identity Number of the consignee, if registered; (iv) Harmonised System of Nomenclature code and description of goods; (v) Quantity(provisional, where the exact quantity being supplied is not known); (vi) taxable value; (vii) tax rate and tax amount-central tax, State tax, integrated tax, Union Territory tax or cess, where the transportation is for supply to the consignee; (viii) place of supply, in case of inter State movement; and (ix) signature (c) The details of challan in respect of goods dispatched to a job worker or received from a job worker or sent from one job worker to another during a quarter shall be included in FORM GST ITC-04 furnished for the period on or before the twenty-fifth day of the month succeeding the said quarter. (d) Where the inputs or capital goods are not returned to the principal within the time stipulated, it shall be deemed that such inputs or capital goods had been supplied by the principal to the job-worker on
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