Summary: Job work under GST refers to a process where a registered principal sends goods, either inputs or capital goods, to a job worker for treatment or processing. To initiate this, the principal must provide a challan containing essential details such as the GSTIN and address of both the principal and job worker, a description of the goods, their HSN code, quantity, taxable value, and applicable tax rate. The principal must also inform the Assessing Officer, which is done by filing Form ITC-04. The filing frequency of ITC-04 depends on the principal’s turnover: those with a turnover exceeding Rs. 5 crores must file semi-annually, while those with a turnover of Rs. 5 crores or less must file annually, both by the 25th of the following month. Goods sent for job work must be returned within specified time limits: capital goods within three years and inputs within one year. If goods are not returned within these timelines, they are treated as a supply from the date sent, necessitating tax payment by the principal. Additionally, the principal cannot supply goods from the job worker’s premises without declaring the job worker’s place as an additional business location, unless the job worker is GST-registered or the goods fall under specified notifications by the Commissioner.
Meaning of Job Work:
A registered person (Principal) sends goods (inputs or capital goods) to another person (Job Worker) for any treatment or process on the goods sent is understood as job work.
Procedure to send goods to job worker:
The Principal will send goods to job worker under the cover of a challan containing Address & GSTIN of Principal, Address & GSTIN (if registered) of Job Worker, Goods Description, HSN, Quantity, Taxable Value & Tax Rate.
The Principal Shall Intimate to the Assessing Officer. The Filing of Form ITC-04 shall be deemed to be the intimation to the Assessing Officer.
If turnover is more than Rs. 5 Crores then ITC-04 will be furnished half yearly (April to September) on or before 25th of the succeeding month.
If turnover is Rs. 5 Crores or less then ITC-04 will be furnished the financial year (April to March) on or before 25th of the succeeding month.
Time Limit to return the goods sent for job work
The Job worker will return the goods to the principal:
Capital goods should be returned within 3 years and Input goods should be returned within 1 year from date of goods sent.
If goods are not returned within the prescribed time limit then goods sent shall be treated as supply from the date of goods sent and the principal will declare the same as supply in GSTR-1 and will be liable to pay tax along with applicable interest.
The time limit of returning goods is not applicable to moulds & dies, jigs & fixtures or tools.
Other Provision:
The principal shall not supply the goods from the place of business of job worker without declaring principal place of business of job worker as his additional place of business except:
(i) where the job worker is registered under GST Act, or
(ii) where the goods sent for job work are the goods notified by the Commissioner.
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