Job work sector is an integral part of manufacturing process and contributing significant role in the Indian manufacturing industry, by its nature and importance GST gives the special attention on this sector and made some special provision related to Job work industry.
Generally job work sector majorly consists of small scale industries, hence GST provision given some simplified rules and compliance to make them comfort.
Job work in general meaning is that processing or working with raw materials or semi-finished goods or intermediate goods supplied by the Principal manufacturer to the job worker.
Section 2(68) of the CGST Act, 2017 defines job work as ‘any treatment or process undertaken by a person on goods belonging to another registered person’. The one who does the said job would be termed as ‘job worker’. 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.
Principal manufacturer means the person who providing the raw material or semi-finished goods or intermediate goods for processing of goods to the Job worker.
The person who is actually doing the job work process called Job worker
Registration under GST by the principal & Job worker depends on their registration criteria under section.22 & 23 of the CGST Act. However the registration under GST will give advantage to avail the special provision under GST for job work. i.e. Input credit, GST tax rate etc.
|Principal Manufacturer||Job worker||GST rate|
|Registered||Registered||Rates specified in chapter heading 9988 for the respective goods/services|
|*Refer Circular No. 126/45/2019-GST dt:22/11/2019|
Principal manufacturer can send the either input goods or Capital goods for the job work manufacturing process subject to certain conditions and intimation without payment of tax.
Goods sent for job work required to returned to principal manufacturer within the prescribed time limit under GST act as below
1. Input Goods- within 1 Year
2. Capital Goods – Within 3 Years
3. Moulds, dies, Jigs and fixture or tools – Returning provision not apply.
The inputs or capital goods shall be sent to the job worker under the cover of a challan issued by the principal. The challan shall be issued even for the inputs or capital goods sent directly to the job worker. The challan shall contain the details specified in rule 10of the Invoice Rules.
Intimation by Principal to the GST authorities – Principal manufacturer has to file intimation about the goods sent for job work with GST authorities in the GST form- ITC-4.
ITC-4 Should be filed by the principal manufacturer every quarter for the goods sent for job work during the quarter.
The due date for ITC-4 is on or before 25th of the month succeeding the quarter subject to the extension notified by the department if any for the relevant quarter.
ITC-4 filed by Principal manufacturer should contain the following details
1. Goods dispatched to a job worker or
2. Received from a job worker or
3. Sent from one job worker to another
4. Goods received back from the job worker
5. Details of another job worker if the goods sent from one job worker to other.
ITC-4 should be filed online form.
1. The principal manufacturer can avail the input credit on the goods/capital goods sent for job work
2. Principal manufacturer eligible to avail input credit even goods are sent directly to the job worker premised without bringing in to the principal`s premises.
After job work process the job worker can clear the goods from their premises to as below
|To||Payment of Tax||Conditions ( if any)|
|Principal||Not required||No conditions|
|Another Job worker||Not Required||No condition|
|Buyer ( for sale)||Required ( For clearing within India)
Not Required ( For Exports)
|Job worker premises need to be registered as either Principal`s additional place of business or Job worker own registration|
Waste/scrap generated during job work process can be cleared by the registered job worker or Principal on payment of tax as per sec.143 (5) of CGST act.
There are multiple criteria for goods movement under job work as tabulated below along with eway bill generation requirement.
|Goods/Inputs from place||Goods/Inputs to place||Movement type||Eway bill generation limit||Eway bill primary responsibility|
|Principal||Job worker||Intra state||Rs.50000||Principal|
|Principal||Job worker||Inter state||Limit N/A||Principal|
|Job worker – Registered||Principal||Intra state||Rs.50000||Job worker|
|Job worker – Registered||Principal||Inter state||Limit N/A||Job worker|
|Job worker – Unregistered||Principal||Intra state||Rs.50000||Principal|
|Job worker – Unregistered||Principal||Inter state||Limit N/A||Principal|
|Job worker – Registered||Customer- For Sale||Intra state||Rs.50000||Job worker|
|Job worker – Registered||Customer- For Sale||Inter state||Limit N/A||Job worker|
|Job worker – Unregistered||Customer- For Sale||Intra state||Rs.50000||Principal|
|Job worker – Unregistered||Customer- For Sale||Inter state||Limit N/A||Principal|
|Job worker place registered as Principal`s Additional place of business||Customer- For Sale||Intra state||Rs.50000||Principal|
|Job worker place registered as Principal`s Additional place of business||Customer- For Sale||Inter state||Limit N/A||Principal|
Regular periodical return need to be complied by both principal & registered job worker i.e GSTR-1, GSTR-3B etc. depending on their applicability and principal manufacturer need to file the ITC-4 as stated in point no. 8 for the goods/inputs sent by them for job work.