Job Work procedures under GST

Introduction: This article discusses in detail about Job work procedures under GST, related ITC provisions, and its related rules and transition provisions.

As per Section 2(68) of CGST Act, “Job work” means any treatment or process undertaken by a person on goods belonging to another registered person.

It means that a person who is treating or processing the goods belonging to other person is calledjob worker and the person to whom the goods belong is called ‘principal’.

A manufacturer may send out his goods to a job work for an initial process, intermediate process, assembly, packaging or any other completion process & later supply such goods to its customers or use in any other manufacturing process accompanied by its own.

The goods sent for job work may be raw material, components parts, semi finished goods & even finished goods.

The resultant goods could be with the same characteristics or with the variations of the product sent for job work.


‘Job work’ is a service as per the point 3 of schedule II of CGST Act.

A “job worker’ is required to obtain registration if his aggregate turnover exceeds the prescribed threshold (i.e Rs.20 lakh / Rs.10 lakh). (Sec. 22)

The value of goods of principal directly supplied from the job worker’s premises will be included in the aggregate turnover of the principal.

The value of goods or services used by the job worker for carrying out the job work will be included in the value of services supplied by the job worker.

Job work procedure – Sec. 143

1. A registered person (i.e. “Principal”) may send any inputs, or capital goods, without payment of tax, to a job worker for job work and from there to subsequent job worker and likewise and shall:

a) Bring back to any of his business place without payment of tax:

i. Capital Goods other than mould & dies, Jigs & fixtures, or tools – within 3 years;

ii. Input Goods– within 1 year

b) After completion of job work, supply from the place of business of job worker on payment of tax within India or export with or without payment of duty for export.

2. The “Principal” has  to declare the place of business as his additional palce of business except where-

a) The job worker is registered;

b) The “Principal” is engaged in supply of such goods as may notified by the Commissioner.

3. The “Principal” shall keep & maintain proper books and accounts for goods sent on job work.

4. Any waste and scrap generated during job work may be supplied by:

a) the job worker from his place of business on payment of tax, if such job worker is registered; or

b) the principal, if such job worker is not registered;

5. The word “input” includes intermediate or semi finished goods arising from any treatment or process carried by the principal or the job worker.

Input tax credit in respect of inputs or capital goods sent for job work

A. The principle can take ITC in respect of inputs, semi finished goods or capital goods sent to job worker:

i. From principal’s place of business ; or

ii. Directly from the place of supply of the supplier of such goods (Section 19(2)).

B. The goods must be sent under cover of Challan containing below details:

i. date and number of the delivery challan

ii. name, address and GSTIN of the consigner and consignee

iii. HSN code, description and quantity of goods

iv. Taxable value, tax rate, tax amount- CGST, SGST, IGST, UTT separately

v. Place of supply and signature (Rule 55)

C. The details of challans issued must be shown in FORM GSTR-01.

D. Quarterly details of challans in respect of:

i. goods dispatched to a job worker; or

ii. received from a job worker; or

iii. sent from one job worker to another

shall be included in FORM GST ITC-04 furnished for that period on or before the twenty-fifth day of the month following the said quarter.

E> The goods send must be received back by the principal manufacture within the following period:

i. Capital other than mould & dies, Jigs & fixtures, or tools – within 3 years;

ii. Input Goods- within 1 year

from date of being send out or receipt by job worker depending on place of business from where goods are send.(Sec 143)

F. Effective date for goods send depends on place of business:

i. If sent from principal’s place of business- Date of goods send out

ii. If sent directly from the place of supply of the supplier of such good- Date of receipt by job worker.

G. If the inputs or capital goods are not returned to the principal with in time as per section 143, such goods will be treated as supply from effective date and tax will be payable on such deemed supply and the challan issued will be treated as an invoice for such supply and such supply shall be declared in FORM GSTR-1 and the principal shall be liable to pay tax along with interest.

H. The word “Capital Goods” here also includes Plant & Machinery.

General Transitional provisions for  relating to Job work-Sec 140 & Rule-117

1. Every registered person except Composition Dealer, is entitled to take credit of input tax paid u/s 140 by filing FORM GST TRAN-1 within 90 days

2. Every registered person except having duty paid closing stock of inputs or inputs contained in semi finished goods or finished goods in respect of which:

i. not having possession of duty paying documents and

ii. having furnished stock held by him in  FORM GST TRAN-1,  

is further required to submit FORM GST TRAN-2 at the end of each of the six  tax periods   indicating therein, the details of supplies of such goods made during tax period to claim input tax credit in respect of such goods.

Transitional provisions relating to Job work- Sec 141 & Rule-119

1. Where any inputs, or partially processed inputs, semi finished goods, excisable goods are sent or removed under the existing law ( like VAT or Central Excise) prior to introduction of GST and such goods are returned within 6 months from the appointed date to said place, then no tax is payable.

2. If such goods are not returned within prescribed time of 6 months, the input tax credit availed will be recovered as per sec. 142(8)(a).

3. The tax as per point 2 above is not payable, it the manufacture and the job worker declare the details of the input or goods held in stock by the job worker on behalf of the manufacture on the appointed day i.e. 01/07/2017 in FORM GST TRAN-1 within 90 days.

The author is a practising CA and is registered Insolvency Professional. He can be reached at [email protected] , Mob. +91 9953587496.

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  1. Kisansinh N Raulji says:

    We manufacturing of chemicals, 90% activity of Job work, before GST we not avail credit of capital goods and Input Service Menpower Supply, security service, legal service, after GST said ITC avail or not.

    Pl reply.

    K.N.. Raulji
    Mobile – 9924421241

  2. RAGHU HS says:

    In excise regime, job worker has taken credit of input material sent directly to him on consignee basis. Job worker has declared stock held and value of credit available with him on behalf of principal(FORM GST TRAN-1). Under what provision or rule job worker can pass the credit back to Principal under GST regime ?

  3. jitendra kumar sharma says:

    can one unit registered in Gurgaon under gst in one PAN number send the goods for jobwork to their another unit registered in Bangalore under the same PAN (DISTINCT PERSON).
    please help to advise.

  4. SANJAY KORDE says:


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May 2021