GST Job work Rules, Definitions, Procedure, Supply by Job Worker

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GST Job work Rules, Definitions, Procedure, Supply by Job Worker. “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 accordinglyIntimation to send taxable goods, without payment of tax, to a job worker for job-work and from there subsequently send to another job worker and likewise with prior permission of The Commissioner. Now check more details for “GST Job work Rules, Definitions, Procedure, Supply by Job Worker” from below…

GST JOB WORK PROCEDURE

GST Job work – Definition

  • undertaking any treatment or process
  • on goods
  • belonging to another registered taxable person

Job work procedure (Sec 143 )

Supply from Principal  Job-worker – Not taxable, if

Inputs – Returned within 1 year/ CG – Returned within 3 years or

  • Inputs –after completion of job work or otherwise

Supplied from Job-worker premises – on payment of tax within 1yr(inputs) & 3yr(CG) or non- payment of tax for exports – Unless Principal declares the unregistered job workers premise as his additional place of business -Except

  • If job worker is registered u/s 25 or
  • Principal is engaged in the supply of such goods notified by Commissioner

Accountability & Responsibility of inputs/CG – with the principal

CG doesn’t include moulds and dies, jigs and fixtures, or tools

Input tax credits: sent to job-worker

  • The principal is entitled to take credit on inputs sent to a job worker for job work if the said inputs, after completion of job work, are received back within one year of their being sent.
  • The principal is entitled to take credit on inputs even if the said inputs are directly sent to job worker without being brought to his place of business, and in such case the period of one year shall be counted from the date of receipt by job worker.
  • The principal is entitled to take credit on capital goods sent to a job worker for job work if the said capital goods, after completion of job work, are received back within 3 years of their being sent.
  • The principal is entitled to take credit on inputs even if the said capital goods are directly sent to job worker without being brought to his place of business, and in such case the period of 3 years shall be counted from the date of receipt by job worker.
  • The restriction of period shall not apply to moulds and dies,jigs and fixtures,or tools sent to job worker for job work
  • where the inputs or capital goods are not received back within the time limit specified, he shall pay an amount equivalent to the input tax credit availed of on said goods along with the interest specified in Section 50.
Particulars Time Limit (Inputs) Time Limit (Capital Goods)
Input/capital goods sent to job worker for job work (including when sent directly to
the job worker by the supplier on behalf
of the principal)
One years from the date of their being sent 3 years from the date of their being sent

Inputs/CG not returned – Job work supply by Job worker

If inputs not returned/supplied as per section 143(b)(i) or (ii) within 1 year for sending

  • DeemedSupply
  • inputs supplied by principal on day of goods were sent out

If CG not returned/supplied S 143(b)(i) or (ii) within 3 years for sending

  • Deemed supply
  • CG supplied by principal on day of goods were sent out

Supply of goods after completion JW by a Registered JW- treated as supply by Principal [Expln (ii) to Sec 22(4)]

Manufacturer and the job worker to declare stock on the appointed date

ITC Rule 11

  • Inputs or CG to be sent to JW to be issued under challan (as per Rule- Invoice 8) by Principal
    • Including cases where inputs/CG directly sent directly to JW
  • Challans of goods dispatched and /or received to/from JW to be reported in
    Form GSTR -1
  • If inputs/CG not returned in time – Challan will be deemed to be invoice
  • Capital good shall include Pl & Mach

Goods Sent on Job Work Received on or After Appointed Date

Goods Sent on Job Work Received on or After Appointed Date

Other Example to Understand  Job Work Related Provision

Job Work Related Provision

Some issues

Job-work

Does it require to result in “Manufacture”? – No, broad definition

What if goods are belonging to ‘URD’? Would it be still a job-work?

  • What if the person becomes taxable persons at a later date?

Can the job-worker supply/transfer goods to another job-work? If yes, would it be taxable? – Also consider expln (ii) to Sec 22(4)

Should the Principal and Job worker be located in same state/UT? No – refer FAQ 16

CG doesn’t include moulds and dies, jigs and fixtures, or tools

  • Is it, supply of moulds and dies, jigs and fixtures, or tools to Job-worker – TAXABLE?
  • refer FAQ 10

Supply of scrap/Waste

Supply of waste/scrap

  • Generated during job-work
  • May be supplied from job-worker premises
  • On payment of tax by job-worker(if registered)
  • Or on payment of tax by principal

What if scrap is returned back to Principal?

  • Is it taxable? If yes, in whose hands? Principal or Job-worker
  • What if job-worker is not registered? RCM?

Transitional provisions

Inputs/ semi-finished goods removed in Old regime – returned in GST regime

  • Not taxable – if returned within 6m from appointed day. Can be extended for another 2m by the Commissioner
  • And only if principal & job worker declare the details of inputs held in stock
  • If above conditions not met – ITC liable to be recovered u/s 142(8)(a)
  • The manufacturer may transfer the goods from said other premises on payment of tax in India or without payment of tax for Export within the specified period

What about Capital goods sent/ removed to JW under existing law?

  • What about Dies, Moulds, Jigs, fixture or tools?

Value of goods held by registered job-worker of principal not to be included in aggregate turnover of the job-worker [expln- to Sec 22(4)]

 

On our website we have provided all the details of GST Act and GST Sections 2017. We hope that our article will be helpful for you to understand the GST Act 2017.

 

Check Also:

Reverse Levy on Supplies from Unregistered Persons under GST Regime

Charging and Collection of Tax under CGST Act 2017 with Schedules

Rajasthan GST Act 2017, Rajasthan Goods and Service Tax Act 2017

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