JOB WORK

Background

GST a is tax After various issues preparing for GST has up thresholds, rate structure, cess. four flight on 1st July 2017. is now reality, It a trigger, which transformation all major and council GST rules, Exemptions, compensation Finally, four-tier will lead to business for industries. Considering FAQ’s, come with GST rate structure took a flight on 1st July 2017.

Sec 143– Job work Basic:

Nowadays most of the corporate are outsourcing certain processes so as to reduce the cost of manufacturing or output. However FAQ hits around as to how the same shall be treated under GST Regime.

Definition:

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- clause 2(68) of CGST Act, 2017.

Understanding of the section:

Supply from Principle place of business/Registered Person

job worker

Supply from Place of business of Job Worker

without payment of tax

Terms and conditions for Direct Supply:

Terms and conditions for Direct Supply

When the goods transferred to the job worker shall be treated as Deemed Supply

When the goods are transferred

Conditions of Treating Scrap out of  processing by Job Worker

conditions of treating scrap

(Author can be reached at ca.agrawalshivangi@gmail.com)

Author Bio

Qualification: CA in Practice
Company: Shivangi R and Associates
Location: Mumbai, Maharashtra, IN
Member Since: 07 Jul 2017 | Total Posts: 9
I am a member of the Institute of Chartered Accountants of India (ICAI), with professional experience of more than 6 years in assisting array of clients based in Solapur, Mumbai and outside India in areas of Domestic and International taxation, advisory and litigation support, Audit and certificati View Full Profile

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4 Comments

  1. PARAG says:

    A PRINCIPAL IS IN DELHI AND JOBWORKER IN GUJARAT AFTER PROCESS OF JOBWORK HANDOVER THE GOODS TO ANOTHER JOBWORKER IN GUJARAT WHICH TAX SHOULD HE CHARGE TO PRINCIPAL IGST OR C / S GST ?? PLEASE GIVE YOUR KIND ADVICE. THANKS IN ADVANE.

  2. Suneel S says:

    Dear Madam,
    Earlier there was exemption of Service Tax on Job work charges if duty is payable on finished goods. Is there any exemption in GST to Job worker ?

    1. P Kandaswamy says:

      In GST regime also, after the job work process, if the job worked goods (including scrap, if any) or services returned back to Principal registered supplier, tax does not arise. Goods or Services are received from the Principal registered Supplier through Delivery Challan and job worker returns the job worked goods (scrap, if any) or services through a Delivery Challan.
      If the job worked goods or services are directly supplied to other registered suppliers based on Principal registered supplier’s schedule, then the transfer is categorized under Supply and hence Tax invoice has to be raised. Under these circumstances, the job worker (a registered supplier) has to obtain Tax input Invoice from his Principal registered Supplier for availing the input tax credit.
      When a registered supplier carries the activities of job work as well as supply of goods or services, the documentation for job work as well as supply are to be maintained clearly & separately.

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