GST – GST FAQ 3rd Edition – December, 2018 – 09 – 9. Job Work Q 1. What is job work? Ans. Job work means undertaking any treatment or process by a person on goods belonging to another registered taxable person. The person who is treating or processing the goods belonging to other person is called job worker and the person to whom the goods belongs is called principal . This definition is much wider than the one given in Notification No. 214/86 – CE dated 23rd March, 1986. In the said notification, job work has been defined in such a manner so as to ensure that the activity of job work must amount to manufacture. Thus the definition of job work itself reflects the change in basic scheme of taxation relating to job work in the proposed GST regime. Q 2. Whether goods sent by a taxable person to a job worker will be treated as supply and liable to GST? Why? Ans. It will be treated as a supply as supply includes all forms of supply such as sale, transfer, etc. However, the registered taxab
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ncluded in the aggregate turnover of the principal. However, the value of goods or services used by the job worker for carrying out the job work will be included in the value of services supplied by the job worker. Q 5. Can a principal send inputs and capital goods directly to the premises of job worker without bringing it to his premises? Ans. Yes, the principal is allowed to do so. The input tax credit of tax paid on inputs or capital goods can also be availed by the principal in such a scenario. The inputs or capital goods must be received back within one year or three years respectively failing which the original transaction would be treated as supply and the principal would be liable to pay tax accordingly. Q 6. Can the principal supply the goods directly from the premises of the job worker without bringing it back to his own premises? Ans. Yes. But the principal should have declared the premises of an unregistered job worker as his additional place of business. If the job worker
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f business or even when such the inputs or capital goods are directly sent to a job worker without their being first brought to his place of business. However, the inputs or capital goods, after completion of job work, are required to be received back or supplied from job worker s premises, as the case may be, within a period of one year or three years of their being sent out. Q 9. What happens when the inputs or capital goods are not received back or supplied from the place of business of job worker within prescribed time period? Ans. If the inputs or capital goods are not received back by the principal or are not supplied from the place of business of job worker within the prescribed time limit, it would be deemed that such inputs or capital goods had been supplied by the principal to the job worker on the day when the said inputs or capital goods were sent out by the principal (or on the date of receipt by the job worker where the inputs or capital goods were sent directly to the pl
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the maintenance of proper accounts related to job work? Ans. It is completely the responsibility of the principal to maintain proper accounts of job work related inputs and capital goods. Q 14. Are the provisions of job work applicable to all categories of goods? Ans. No. The provisions relating to job work are applicable only when registered taxable person intends to send taxable goods. In other words, these provisions are not applicable to exempted or non-taxable goods or when the sender is a person other than registered taxable person. Q 15. Is it compulsory that job work provisions should be followed by the principal? Ans. No. The principal can send the inputs or capital goods after payment of GST without following the special procedure. In such a case, the job-worker would take the input tax credit and supply back the processed goods (after completion of job-work) on payment of GST. Q 16. Should job worker and principal be located in same State or Union territory? Ans. No this is
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of job work. Q 18. Can a person other than registered person follow the job work procedure under the Act? Ans. No. It is important to note that the provisions of section 143 of the CGST Act are applicable to a registered person. Thus, it is only a registered person who can send the goods for job work under the said provisions. Q 19. In case the principal and job worker are located in different states, is it necessary for the job worker to obtain compulsory registration? Ans. No. Where the principal and the job worker are located in different States, the requirement for registration flows from section 24(i) of the CGST Act which provides for compulsory registration of suppliers making any inter-State supply of services. However, exemption from registration has been granted in case the aggregate turnover of the inter-state supply of taxable services does not exceed ₹ 20 lakhs or ₹ 10 lakhs in case of special category States except Jammu & Kashmir in a financial year vide
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er should send one copy of the said challan along with the goods, while returning them to the principal. The FORM GST ITC-04 will serve as the intimation as envisaged under section 143 of the CGST Act,2017. Q 22. What are the legal/documentary requirements where goods are sent by one job worker to another job worker? Ans. In such cases, the goods may move under the cover of a challan issued either by the principal or the job worker. In the alternative, the challan issued by the principal may be endorsed by the job worker sending the goods to another job worker, indicating therein the quantity and description of goods being sent. The same process may be repeated for subsequent movement of the goods to other job workers. Q 23. What are the legal/documentary requirements where goods are returned to the principal by the job worker? Ans. The job worker should send one copy of the challan received by him from the principal while returning the goods to the principal after carrying out the job
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directly. Q 25. What are the legal/documentary requirements where goods are returned in piecemeal by the job worker? Ans. In case the goods after carrying out the job work, are sent in piecemeal quantities by a job worker to another job worker or to the principal, the challan issued originally by the principal cannot be endorsed and a fresh challan is required to be issued by the job worker. Q 26. What is the mode and manner in which the principal is required to intimate the details of goods sent for job work? Ans. Rule 45(3) of the CGST Rules provides that the principal is required to furnish the details of challans in respect of goods sent to a job worker or received from a job worker or sent from one job worker to another job worker during a quarter in FORM GST ITC-04 by the 25th day of the month succeeding the quarter or within such period as may be extended by the Commissioner. It is the responsibility of the principal to include the details of all the challans relating to goods
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ted period? Ans. If such goods are returned by the job worker after the stipulated time period, the same would be treated as a supply by the job worker to the principal and the job worker would be liable to pay GST if he is liable for registration in accordance with the provisions contained in the CGST. Q 29. Whether the value of moulds and dies, jigs and fixtures or tools which have been provided by the principal to the job worker and have been used by the latter for providing job work services would be included in the value of job work services? Ans. Section 15 of the CGST Act lays down the principles for determining the value of any supply under GST. Importantly, clause (b) of sub-section (2) of section 15 of the CGST Act provides that any amount that the supplier is liable to pay in relation to the supply but which has been incurred by the recipient will form part of the valuation for that particular supply, provided it has not been included in the price for such supply. Accordingl
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