Job work under GST

Job Work means any treatment or process undertaken by a person on goods belonging to another person. The ownership of the goods does not transfer to the job worker, but it rests with the principal. The job worker is required to carry out the process specified by the principal on the goods. Persons carrying on the job work activity is termed as job worker.

For Example: Painting, Packing, Fitting etc.

This document covers

Input Tax Credit (ITC) on Goods
Time Limit for receipt of Goods
Procedural Aspects
FAQ's

1. Input Tax Credit (ITC) on goods sent for Job Work

Goods can be sent to job worker from the Principal place of business or directly from the place of supply of the supplier of such goods.
The Principal is entitled to take input tax credit on inputs and capital goods sent for job work even if the inputs are directly sent to job worker.
If the goods sent on job work are not received back within the respective time limits, it shall be deemed supply from the principal to job worker on the date of goods sent or receipt of goods at job worker premises.

2. Time Limit for receipt of goods from Job Worker to Principal

The goods sent by the Principal must be received by him in the following time limit.

Input Goods: The input goods should be received within 1 year.

Capital Goods: The Capital goods should be received within 3 years

If the goods are sent from Principal Place of Business, the time limit of 1 year / 3 years should be from the date of goods sent.
If the goods directly sent from place of supply of supplier of such goods: 1 year / 3 years should be from the date of receipt of said inputs at the job worker’s premises.

3. Job Work Procedural Aspects

A registered person (Principal) can send the goods to job worker under intimation and subject to certain conditions without payment of tax.
After processing of goods, the job worker may clear the goods to

Another job worker for further processing.
Dispatch the goods to any of the Principal’s Place of business without payment of tax.
Remove the goods on payment of taxes in India or without payment of tax for export outside India on fulfilment of conditions. It can be availed by the principal on declaring premise of the job worker as his additional place of business in registration.

The above declaration is not required if the job worker is already registered under Section 25 or principal is engaged in supply of notified goods
The Principal is required to intimate the jurisdictional officer containing the details of the description of inputs to be sent by the principal, nature of processing to be carried out by the job worker, details of other job workers etc

4. Quick GST FAQ's

A comprehensive list of frequently asked questions on Job work under GST

1.How can the job worker clear the goods after processing?

After processing of goods, the job worker may clear the goods to

Another job worker for further processing.
Dispatch the goods to any of the place of business of the principal without payment of tax.
Remove the goods on payment of tax within India or without payment of tax for export outside on fulfilment of conditions.

2.Who is responsible for the maintenance of proper accounts related to job work?

The principal is responsible for maintenance of proper accounts of input and capital goods sent to job worker.

3.Can the principal directly supply goods from the premises of job worker without declaring the premises of job worker as his additional place of business?

The goods can be directly supplied from the place of business of job worker without declaring it as additional place of business in 2 circumstances

If the job worker is a registered taxable person.
If the principal is engaged in supply of goods as may be notified by the commissioner.

4.Whether the goods of principal directly supplied from the premises of job worker will be included in the aggregate turnover of the job worker?

No, it will be included 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.

5.Is the principal required to intimate the jurisdictional officer before the supply of goods to job worker?

The principal would be required to intimate the jurisdictional officer containing the details of description of inputs intended to be sent by the principal and the nature of the processing to be carried out by the job worker. The said intimation shall also contain the details of the other job workers.

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