GST on scrap sales credit note by job worker
Query (Issue) Started By: – K.Srinivasan Kuppuswamy Dated:- 27-11-2017 Last Reply Date:- 7-6-2018 Goods and Services Tax – GST
Got 11 Replies
GST
Sir,
We are sending the semi finished goods for machining to job worker. After machining the job worker sends the finished goods to us. The swarf / borings generated out of machining is being sold by the job worker on payment of applicable GST.
The job worker issues us the credit note for the material value sold by them on our behalf.
In this context I request your valuable opinion whether the GST applicable on credit note issued by the job worker for the material value.
Regards
K Srinivasan
Reply By ANITA BHADRA:
The Reply:
Sir ,
In terms of Section 143(5) of CGST Act 2017 -'any waste and scrap generated during the job work may be supplied by the job worker directly from his place of business on payment of tax, if such job worker is registered, or by the principal, if the job
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f supply. Credit note may be on account of sales return, discount, etc.
If job workers issues credit note, same will be against what ??? Against his job charges, not possible in present scenario.
Job worker has retained money from scrap sales, if he has been authorised to make scrap sale. No need of credit note as the basic amount excluding GST can be set off against job charges receivables due. The same is treated at par with payment made by principal to jobworker.
Alternatively you can raise supply invoice to job worker for supply of waste of payment of gst.
practically think of entries from return perspective, impact of debit / credit note will be on your sales which may not get reconciled with sales in balance sheet.
As already shared by friends, no GST but take practical view from all aspects.
Reply By K.Srinivasan Kuppuswamy:
The Reply:
Sir
We are sending raw castings for machining
After machining the borings(waste) cleared by job worker directly to the scrap vendor on
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nder delivery challan.. After machining the job worker sends the finished goods to us and raise service invoice on us with GST for job charges. . The swarf / borings generated out of machining is being sold by the job worker on payment of applicable GST to the scrap vendor
The job worker issues us the credit note on us for the material value only without gst since already GST charged by him while removing..
That credit will attract GST or not.
I request your valuable opinion whether the GST applicable.
Regards
K Srinivasan
Reply By Ramaswamy S:
The Reply:
The job work charges can be negotiated with the job worker for the net quantity and the job worker sells the scrap arising during the course of job work.
The job worker pays the GST on the scrap sold by him.
This will reduce unnecessary paper work and complications.
Regards
S.Ramaswamy
Reply By Ganeshan Kalyani:
The Reply:
In my view, the job worker need not issue credit note for scrap sold by him. If even if does then i
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