Job work is a well-established norm where a large number of industries are dependent on outside support for completing their manufacturing activities. Job work is the processing or working on goods supplied by another person / entity to complete a part or whole of the process. Job work can be undertaken for the initial process, intermediate process, assembly, packing or any other completion process or complete manufacturing.

Section 2(68) of the CGST Act provides that

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.

I wrote an article “Job Work Provisions Under GST” published in Taxguru on 23rd May’2017 where in complete details of Job Work under GST was explained. Now in this article let us discuss about E-Waybill Provisions for Job Work.

GST E-Way bill needs to be generated not only for the transport of goods on account of sales but also for any other reason like inter-branch transfer, purchase from an unregistered person and transfer on account of job work.

Here we shall discuss Four Scenarios :

1. Principal Sending the Goods to Job Worker

2. Goods Sent Directly to the Job Worker from Third Party

3. Goods Sent from one Job Worker to another

4. Goods Returned after Job Work

Principal Sending the Goods to Job Worker :

As per Rule 45 of CGST Rules :  Conditions and restrictions in respect of inputs and capital goods sent to the job worker.-

(1) The inputs, semi-finished goods or capital goods shall be sent to the job worker under the cover of a challan issued by the principal, including where such goods are sent directly to a job-worker.

(2) The challan issued by the principal to the job worker shall contain the details specified in

Rule 55.

Rule 55 (1)(b)  of CGST Rules :  Transportation of goods without issue of invoice.- For the purposes of  transportation of goods for job work, the consigner (Principal) may issue a delivery challan, serially numbered not exceeding sixteen characters, in one or multiple series, in lieu of invoice at the time of removal of goods for transportation, containing the details like date and number of the delivery challan; name, address and Goods and Services Tax Identification Number of the consigner;  name, address and Goods and Services Tax Identification Number or Unique Identity Number of the consignee, if registered; Harmonized System of Nomenclature code and description of goods; quantity (provisional, where the exact quantity being supplied is not known);  taxable value; tax rate and tax amount;  place of supply, in case of inter-State movement; and signature.

Rule 55 (2) of CGST Rules : The delivery challan shall be prepared in triplicate, in case of supply of goods, in the following manner, namely:–

(a) the original copy being marked as ORIGINAL FOR CONSIGNEE;

(b) the duplicate copy being marked as DUPLICATE FOR TRANSPORTER; and

(c) the triplicate copy being marked as TRIPLICATE FOR CONSIGNER.

Rule 138 of the CGST Rules, 2017 provides for the e-way bill mechanism and in this context it is important to note that “information is to be furnished prior to the commencement of movement of goods” and “is to be issued whether the movement is in relation to a supply or for reasons other than supply”.

Rule 138 of CGST Rules :  Information to be furnished prior to commencement of movement of goods and generation of e-way bill.-

(1) Every registered person who causes movement of goods of consignment value exceeding fifty thousand rupees

(i) in relation to a supply; or

(ii) for reasons other than supply; or

(iii) due to inward supply from an unregistered person, shall, before commencement of such movement, furnish information relating to the said goods in Part A of FORM GST EWB-01, electronically, on the common portal.

Provided that where goods are sent by a principal located in one State to a job worker located in any other State, the e-way bill shall be generated by the principal irrespective of the value of the consignment

Note : The expression “for reasons other than supply” will include job work, removal for testing purpose, send on approval basis, Non-Taxable Supply etc.

In a nutshell from the above discussions it is very clear that :

1. The Principal sending Goods for Job Work may issue a Delivery Challan in Triplicate : Original for the Job Worker; Duplicate for Transporter & Triplicate to Retain with him as office copy.

2. The Principal to generate E- Waybill before commencement of such movement. E-Waybill is mandatory irrespective of the value of the consignment in case Inter-State Transaction.

  E-Way Bill

Rule 138 of CGST Rules : (Notification No. 34/2017—Central tax dated 15.09.2017)

Where goods are sent by a principal located in one State to a job worker located in any other State, the e-way bill shall be generated by the principal irrespective of the value of the consignment

Goods Sent Directly to the Job Worker from Third Party:

Sec 19 (2) of CGST Act : Notwithstanding anything contained in clause (b) of sub-section (2) of section 16,

the principal shall be entitled to take credit of input tax on inputs even if the inputs are directly sent to a job worker for job work without being first brought to his place of business.

That means the goods may be sent directly from the third party to the job worker. In such case the concept of “Bill to” and “Ship to” provisions shall be applied.

If the addresses involved in ‘Bill to’ and ‘Ship to’ in an invoice / bill belongs to different legal names/taxpayers, then two e-way bills have to be generated.

1. one e-way bill for the first invoice,

2. second e-way bill is from ‘Bill to’ party to ‘Ship to’ party based on the invoice / bill of the ‘Bill to’ party.

For example, A (a third party) has issued invoice to B (Pricipal) as ‘Bill to’ with C (Job Worker) as ‘Ship to’. Legally, both B and C are different taxpayers. Now, A will generate one e-way bill and B will issue Challan and generate one more e-way bill. As goods are moving from A to C directly, the transporter will produce both the invoice & Challan and e-way bills to show the shortcut movement of goods.

 

Goods Sent from one Job Worker to another

As per Sec 143. (1) of CGST Act, any inputs or capital goods, without payment of tax may be sent to a job worker for job work and from there subsequently send to another job worker and likewise.

As per Proviso to Sec 143. (1) of CGST Act, the principal shall not supply the goods from the place of business of a job worker in accordance with the provisions of this clause unless the said principal declares the place of business of the job worker as his additional place of business except in a case—

(i) where the job worker is registered under section 25

That means the if the goods are sent from one Job Worker to another Job Worker, then the Job Worker who causes movement of goods (first / previous Job Worker) need to be registered or the Principal has to declare the place of business of the job worker as his additional place of business

In such cases if the Job Worker who causes movement of goods is registered, the job worker has to generate E-Way Bill otherwise the Principal has to generate E-Way Bill.

Goods Return after Job Work :

Here two Scenarios arise :

1. The Job Worker is Registered

2. The Job Worker is Un-Registered

The Job Worker is Registered :

If the Job Worker is Registered and Goods are returned back to the Principal then, the Job Worker (the movement is caused by Job Worker) has to generate E-Way Bill.

The Job Worker is Un-Registered

Second Proviso to Rule 138(3) :  where the movement is caused by an unregistered person either in his own conveyance or a hired one or through a transporter, he or the transporter may, at their option, generate the e-way bill in FORM GST EWB-01 on the common portal in the manner specified in this rule.

Explanation 1 to Rule 138(3) :  where the goods are supplied by an unregistered supplier to a recipient who is registered, the movement shall be said to be caused by such recipient if the recipient is known at the time of commencement of the movement of goods.

By combined reading of both, it is clear that in case the Job Worker is Un-Registered, then either the Principal or the Transporter may generate the E-Way Bill.

Value for the Purpose of E-Way Bill :

Job worker is required to raise an e-Way Bill on the basis of delivery challan and thus the value to be entered in Part-A of E-Way Bill shall be the value of goods returned and not the job work charges. However, he may send the invoice of job charges along with delivery challan and e-Way Bill. The value to be included in the E-way bill should be inclusive of the job work charges. That means the value should be original value of Goods plus job work charges.

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20 responses to “E-Waybill Provisions for Job Work”

  1. Ravi Harchandani says:

    As per recent FAQs released by CBEC, in “bill to” “ship to” cases only one eway bill is required to be issued! So I think in cases where goods are directly send to job worker only the first supplier needs to issue eway bill.

  2. Rahul Behl says:

    a) What is the format of “Deilvery Challan” when the
    (i) job worker is returning the goods after job work to
    the principal.
    (ii) job worker is sending the goods after job work
    to another job worker.
    b) How to ascertain Taxable Value, Tax Rate & Tax
    Amount when the job worker is issuing a delivery
    challan? For ex. Taxable Value of goods is Rs.100000 and the value of Job is just Rs.10000 moreover say tax rate for the goods is 18% and for the job it is 5%.
    c) How to create an E-way bill for the above mentioned scenarios.
    Thanks in anticipation.

  3. Gopal singh says:

    My Question is : I am sending some instruments for monitoring & sample collection for all over india.These all instruments are returnable after monitoring & taken sample .What’s the procedures of E way Bill? Will I required for E way Bill?

  4. satish says:

    job work plating me e way ki limit h ya nahi

  5. satish says:

    Please advise job work plating me E-way bill ki limit h ya nahi

  6. Vikas Agrawal says:

    My Question is……I send a books for job work which is non taxable but there is a 5 % tax on job work and the value of the books are Rs. 60000, whether the job worker is required to generate eway bill to send back to the principal place of the dealer of the same state or not ?

  7. Saravana says:

    Whether for intra state movement of goods the eway bill is applicable on irrespective of value of goods or not?

  8. SURENTHAR says:

    Dear Sir,

    Please advise For Inter-State job work Value is not more than Rs.50000/- is E-waybill is required?

  9. Prince Sashi Kanth.J says:

    A Jobworker is liable to pay tax of machining charges alone.. If the material value is anyhow high, do he need to pay tax for the material value! This will be a burden to him.. Anyhow it is not fair isnt it.

  10. Mrudul Karandikar says:

    XYZ(Principal) from Maharashtra sending goods for job work to Chennai. The job worker is directly delivering the processed goods from Chennai to Calcutta as per the instructions of XYZ. Who is required to prepare E-Way bill? job worker or XYZ?

  11. Kuldeep Nian says:

    Very Nice Sir.
    After job work In Cases when goods are transported by Railways and Railway Freight is borne by Principal on the basis of Invoice raised by Railways and Job Worker is registered, in this case who is causing movement of goods.
    1. Principal
    2. Job Worker

  12. Bimal Kumar Singh says:

    The value to be included in the E-way bill should be inclusive of the job work charges. That means the value should be original value of Goods plus job work charges.

    Sir, here ewaybill value is inclusive of job work charges but in last you have mentioned (value should be original plus job work charges both are different,

    Please clear it so many confusion

  13. sathiyaseelan says:

    Sir,
    We are supplying goods to job worker in other state & our job worker is further supplying those goods to our customer directly.
    In this case what will be the procedure for E-Way Bill? Pls advice.

  14. K SREEDHAR says:

    E Way Bill on Job work. Kindly clarify the following:

    In your observations you have mentioned and I quote “For example, A (a third party) has issued invoice to B (Pricipal) as ‘Bill to’ with C (Job Worker) as ‘Ship to’. Legally, both B and C are different taxpayers. Now, A will generate one e-way bill and B will issue Challan and generate one more e-way bill. As goods are moving from A to C directly, the transporter will produce both the invoice & Challan and e-way bills to show the shortcut movement of goods.” Unquote
    But in your flow diagram you have shown both Invoice/ E way bill / and Challan being prepared by A [the original Vendor:]. This point is not understood. Kindly clarify

    2) Also in another place you have mentioned that and I quote ” As goods are moving from A to C directly, the transporter will produce both the invoice & Challan and e-way bills to show the shortcut movement of goods” Unquote

    In case “B” The principal is required to generate E way bill on C the Job Worker which is based on DC Challan which again is based on GRN at the place of B the principal. Whether the Principal is expected to challan and E way bill based just on the invoice reference of A the original vendor.

    Please clarify

    Regards

    K Sreedhar

  15. S V SUBBARAO says:

    Excellant ,thank you very much

  16. Vallabh Dani says:

    Sir,
    We are supplying goods to job worker in other state & our job worker is further supplying those goods to our customer directly.
    In this case what will be the procedure for E-Way Bill? Pls advice.
    My Emaiil ID is – excise@rtfpl.com

  17. ATUL says:

    If value of goods is to be reflected in E-way bill by job worker, then rate of tax relevant to said item (according to HSN) will have to be reflected and and tax would be calculated at such rates.
    It has further come to my knowledge that e-way bill generated would be auto-populated in GST portal while preparing GSTR-1.
    It implies that while preparing GSTR-1, the auto-populated supply on his behalf would be full value of goods and tax thereon as reflected in E-way bill.

    Please clarify.

  18. Indexia says:

    Thank you so much Sir! for your valuable article.
    this was indeed very helpful for me as well as my colleagues.Thanks for sharing

  19. Mishra SR ,Dhruv Cotex Pvt Ltd. says:

    Whether Eway bill required if Job worker is situated in the vicinity of principal manufacturer.

  20. SANTOSH KARADKAR says:

    Dear Sir
    please advise us whether eway bill for intra state is applicable for Maharashtra state from 01-02-18.

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