Supply of Goods to Job Worker under GST Law – All Provisions

Supply of Goods to Job Worker under GST Law – All Provisions. First of all, one need to understand the definition of Job work under Revised GST law . After that it will be easier to understand the provision relating to supply of goods to job worker. Goods either input or capital goods can be directly send to Job worker and supply of input can be directly make from job worker’ place subject to the following provisions provided in Section 55 of the Revised GST Law. Now check more details for “Supply of Goods to Job Worker under GST Law”

Supply of Goods to  Job Worker under GST Law

Definition as per Section – 2[68] of CGST Act 2017

“job work” means undertaking any treatment or process by a person on goods belonging to another registered taxable person and the expression “job worker” shall be construed accordingly”

Job Work

  • Include all activities or process whether relates to manufacturing or any operation to complete the process.
  • Goods belong to Registered Person.

JOB WORK PROCEDURE (Sec 143)

¨Principal may under intimation send any inputs or capital goods, without payment of tax, to a job worker for job-work and from there subsequently send to another job worker

AND SHALL

  • Bring back input within one year and capital goods within three years of their being sent out, to place of business without payment of tax
  • Supply such inputs or capital goods, within one year and three years, of their being sent out from the place of business of a job worker on payment of tax within India, or with or without payment of tax for export
  • The principal shall not supply the goods from the place of business of a job worker  unless he declares the place of business of the job-worker as his additional place of business

EXCEPTION

  • (i) where the job worker is registered under section 25; or
  • (ii) where the principal is engaged in the supply of such goods as may be notified by the Commissioner

PRINCIPAL shall be responsible for  keeping proper accounts for inputs or capital goods

  • If INPUTS or CAPITAL GOODS are not received back by principal  or are not supplied within a period of one year or three years of being sent out
  • It shall be deemed that such inputs or capital goods had been supplied to Job Worker on the day when the said inputs/Capital Goods were sent out

Treatment of Waste and Scrap

  • May be supplied by Job Worker on payment of Tax if he is registered.
  • Otherwise by the principal, if the job worker is not registered

Treatment of Waste and Scrap

  • May be supplied by Job Worker on payment of Tax if he is registered.
  • Otherwise by the principal, if the job worker is not registered

ITC on inputs sent to job worker for job work : Sec 19

  • PRINCIPAL shall be allowed input tax credit on such inputs
  • Even if the inputs are directly sent to a job worker for job-work without being first brought to his place of business

Consequences of non receipt of inputs sent for job work

  • Non receipt of inputs within one year of inputs being sent out
  • it shall be deemed that such inputs had been supplied by the principal to the job-worker on the day when the said inputs were sent out

SEC:141 Transitional provisions

¨Where any inputs/semi finished / Finished goods had been removed prior to the appointed day in existing law and such inputs/semi finished goods are returned to the said place within six month from the appointed day, no tax shall be payable.

  • The period of six months can be extended by the Commissioner up to two months
  • If not returned within Six/Eight Months ITC shall be recovered

Provision for supply of goods to Job worker

1. Registered Taxable Person [herein after referred as Principal] to supply goods to job worker for job work without the payment of tax, under intimation and subject to such conditions as may be prescribed. The same goods can be sent to another job worker and so on. To effect the above , following condition need to be satisfied

  • Bring back input after job work or otherwise and/ or capital goods other than mould and dies, jigs and fixture or tool, to any of his place of business without payment of tax within one year and three year respectively.
  • Supply directly from there on payment of taxes within India or with or without payment of taxes for export as the case may be within the period stipulated above.
  • Supply of goods from place of business of job worker within India with payment of taxes, with or without payment of taxes for export, as the may be. Provided the Principal declared the place of business of job worker his additional place of business. In the following cases the said provision shall not be applicable
    • where the principal is supplying such goods as may be notified by commissioner in this behalf.

2. The onus of prove for accountability of input and or capital goods shall be of Principal.

3. Where the inputs sent for job work are not return to principal after job work or otherwise within period of one year being sent out , it shall be treated as supply to job worker on the day of input sent for job work.

4. Where the capital goods other than mould and dies, jigs and fixture or tool, sent for job work are not return to principal after job work or otherwise within period of three year of being sent out , it shall be treated as supply to job worker on the day of capital goods sent for job work.

5. Job worker may supply the waste or scrap generated from job work directly from his place of business on payment of taxes, if he is registered, otherwise by principal, if job worker is not registered

FAQ on Job Work

Question 1. Whether goods sent by registered taxable person to job worker treated as supply of goods and liable to tax?

Ans – No. Proviso 5 of the Schedule –I provides that supply of goods from RTP to job worker shall not be treated as supply of goods as per Section

2. Whether the goods of principal directly supplied from Job worker’s premises will be included in the turnover of Job worker?

Answer – No. That will be added in the turnover of principal.

Q. 3. What are the provision of taking ITC in respect of input/ capital goods sent to job worker?

Ans – As per Section 20 of Revised MGL, Principal shall be entitled to take credit of input or capital goods. If the input or capital goods has not been received back within stipulated time of one year and three year respectively, ITC shall be paid. ITC can be claimed again as when the goods have been received.

Q. 4. Are the provision of job work applicable to all category of person?

Ans – No. it is applicable only to registered taxable person who send goods for job work. In other word , these provision are not applicable to exempted or non taxable goods.

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23 thoughts on “Supply of Goods to Job Worker under GST Law – All Provisions”

  1. My job workers turn over is less tahn 20lakhs. Normally the materials are send to him and received back with in the stipulated time. after wards the processed goods are subject to further manufacture procxess and supplied to my customer. In this process

    1- am to show the job workers premises as additional place of Business.
    2- wht is the time limit to get back the Material.

    regards
    Mohan R

    Reply
  2. My query is whether the job worker is required to get registration under GST . If yes what are the provisions relating to registration of job worker. What are the consequences if the job worker turnover is more than 20 Lakhs and principal supplier is also registered under GST.

    Reply
  3. Dear sir
    Thanks for your valuable information please tell me
    1 what documents we have to send while sending material for job work like 57 f IV Earlier
    2 if principal and jobworker in same state what documents required
    Regards

    Reply
  4. Dear Sir,

    I am a job worker. Under the existing law I am not charging service tax to those people who send me goods under excise challan 4(5)(a).

    Sir kindly guide me whether that exemption will continue under GST

    I am into heat treatment of alloy steel bars. My turnover is above 20Lakhs.

    Reply
    • Ours is heat treatment shop registered under GST. We do heat treatment job works for industries. Our turnover is more than 75 lakhs. We request you to let us know that whether we have to collect tax under GST and how much. What is service accounting code?

      Reply
  5. Dear Sir,

    i have registered firm at gst now., i do the job work interstate., my business is packing of agarbatti, it considered as JOB WORK ., i does not have any pruchases or sales., all the items will be supplied by principal company and we, after completion of job work will return the same along with the waste., could you please let us know that do we need to pay the tax or do we come under tax regime

    Reply
  6. Sir,

    Now in GST how we can send the material to Job Worker, Previously we make a challan named Annexure 4,5 and send the material. But in GST what types of documents we made.

    Kindly solve the isue and oblige.

    Thanks & Regards.

    Reply
  7. Please inform which authority is to be intimated by Principal for sending Inputs to Job Worker.
    Also, if inputs are sent 20 timed every month, has such Intimation to be sent all the 20 times ?

    Reply
  8. SIR WE HAVE REGISTERED FIRM AND WE MANUFACTURER OUR GOODS FROM JOB WORKER THEY ARE NOT REGISTERED AND THEY HAVE NO PAN CARD AND NO TAX PAYER THEY CAN DO JOBWORK FOR RS 60000 TO 70000 PER YEARLY WE SEND RAW MATERIAL BY INPUT OUTPUT JOB VOUCHER IN GST HOW CAN WE MAKE BILL OF JOB WORK .

    Reply
  9. IR WE HAVE REGISTERED FIRM AND WE MANUFACTURER OUR GOODS FROM JOB WORKER THEY ARE NOT REGISTERED AND THEY HAVE NO PAN CARD AND NO TAX PAYER THEY CAN DO JOBWORK FOR RS 8,00,000.00 TO 12,00,000.00 PER YEARLY WE SEND RAW MATERIAL BY INPUT OUTPUT JOB VOUCHER IN GST HOW CAN WE MAKE BILL OF JOB WORK .

    Reply
  10. I am a registered job worker. (from VAT to GST) my turnover is not upto 25lakhs. Shall I have to add GST for the labour charges?

    Reply
  11. What is the format of document (Bill of supply) for sending materials to Job worker similar to old 57(4) challan. Simialarly what is format of document by which we receive the material

    Reply
  12. Upto the introduction of e way Bill , is there intimation of job work possible. What is procedure in case of finished goods come back to principal in two-three parts.

    Reply
  13. Sir,

    I am doing a job work of Grinding of spices ( Chakki ) of other parties. My turnover is around 30 lakhs please let me know if GST is applicable and if yes than on what rates.

    Reply
  14. I am steel fabricator my annual turnover 10 to 13 each metireal with job work 9%+9%ok but repair and maintenance work ,job work eligible tax hou much

    Reply
  15. Dear Sir,

    i have registered firm at gst now., i do the job work interstate., my business is packing of agarbatti, it considered as JOB WORK ., i does not have any pruchases or sales., all the items will be supplied by principal company and we, after completion of job work will return the same along with the waste., could you please let us know that do we need to pay the tax or do we come under tax regime., if yes what is the percentage of stax to be collected from the principal., kindly provide us the information.,

    Reply
  16. what is procedure and documents needed to transfer goods from principal place to jobworker place and there after to another job worker for further process
    and what document will job worker give while returning the semi or finished goods if he is registered and also if he is unregistered
    thabks

    Reply
  17. Suppose we are doing fabrication & manufacturing company and we are giving our job to job worker for processing under challan 4(5) and it would be back withing 1 week. Now the 4(5) challans are not to follow & we are sent the material for processing by Delivery Challan. The Job worker now issue us the bill with CGST & SGST @ 18% as the material are sending by ourselves only for processing. Is these a right to tax the bills on us with 18%

    Reply

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