GST – GST Law and Procedure – 027 – Chapter Twenty Seven Job Work under GST 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 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 regard to removal of goods f
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s without payment of tax. The principal is not required to reverse the ITC availed on inputs or capital goods dispatched to job-worker. b) Principal can send inputs or capital goods directly to the job worker without bringing them to his premises, still the principal can avail the credit of tax paid on such inputs or capital goods. c) However, inputs and/or capital goods sent to a job worker 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. d) After processing of goods, the job-worker may clear the goods to- (i) Another job-worker for further processing; (ii) Dispatch the goods to any of the place of business of the principal without payment of tax; (iii) 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 principal to the third party directly from the premises of the job-worker on payme
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keeping proper accounts for the inputs or capital goods shall lie with the principal. Input Tax credit on goods supplied to job-worker Section 19 of the CGST Act, 2017 provides that the principal (a person supplying taxable goods to the job-worker) shall be entitled to take the credit of input tax paid on inputs sent to the job- worker for the job work. Further, the proviso also provides that the principal can take the credit even when the goods have been directly supplied to the job-worker without bringing into the premise of the principal. The principal need not wait till the inputs are first brought to his place of business. Time Limits for return of processed goods As per section 19 of the CGST Act, 2017, inputs and capital goods after processing shall be returned back to principal within one year or three years respectively of their being sent out. Further, the provision of return of goods is not applicable in case of moulds and dies, jigs and fixtures or tools supplied by the pri
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