Principal is registered person who sends inputs/capital goods to a job worker for carrying out the job work.
The GST law makes special provisions with regard to removal of goods for job work and receiving back the goods after processing from the job worker without payment of GST.
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 job worker, as supplier of services, is liable to pay GST if he is liable to be registered. He shall issue an invoice at the time of supply of the services as determined in terms of section 13 read with section 31 of the CGST Act.
Provisions relating to job work are, inter alia, covered in section 19 and 143 of CGST Act. Provisions of job work under CGST Act have also made applicable to IGST Act vide Section 20 of IGST Act.
It is important to note that, a principal, who can send goods for job work under the said provisions, must be registered person.
Q.1 Whether any inputs, other than goods provided by the principal, can be used by the job worker for providing the services of job work?
Ans: It is clarified that the job worker, in addition to the goods received from the principal, can use his own goods for providing services of job work.
As per section 143, a registered person (Principal) is allowed to send inputs/ capital goods without payment of tax to a job worker and from there to another job worker and after completion of job work bringing back such goods without payment of tax. Such goods need to be removed under intimation.
Q.2 Whether principal can send inputs/ capital goods directly to the job worker without bringing them to his premises?
Ans: Yes, he can do so.
Q.3 If Yes, Whether he needs to declare job worker’s premises as his additional place of business (APoB)?
Ans: No
As far as Job work procedure is concerned, there is no need to declare Job worker’s premise as his APoB.(section 143)
Inputs and/or capital goods (other than mould and dies, jigs and fixtures, or tools) sent to a job worker are required to be returned to the principal within 1 year (inputs) and 3 years (CG) respectively, from the date of sending goods to the job worker.
However, the period of 1 year and 3 years may, on sufficient cause being shown, be extended by the commissioner for a further period not exceeding 1 year and 2 years respectively.
| Description | Time period for bringing them back | Extension on sufficient cause being shown to the commissioner | Total |
| Inputs | 1 year | 2 Years | 3 years |
| Capital Good | 3 years | 2 years | 5 years |
Q.4 What if Goods not received back within the stipulated time?
Ans: If goods are not received back or not supplied(Sold) from the job worker’s premises, within specified time limit [1 year/ 3 years/ extended time period], it shall be deemed to be supply from principal to the job worker from the day when it was sent for job work.
Q.5 What if Goods are retuned back after stipulated time?
Ans: It will be treated as supply by job worker to principal and job worker is liable to pay GST if he is liable for registration.
Q.6 Whether principal needs to intimate the Jurisdictional Officer before supply of goods to job worker?
Ans: Yes, he needs to intimate in FORM GST ITC-04 to the Jurisdictional officer.
The details of challans in respect of goods dispatched to a job worker or received from job worker during a quarter shall be included in FORM GST ITC-0 furnished for that period on or before 25th day of the month succeeding the relevant quarter or within such further period as may be extended by the commissioner by notification in this behalf.
The inputs or capital goods shall be sent to job worker under the cover of challan issued by the principal.
As per Section 19, Principal is allowed to avail ITC on inputs and/or capital goods sent to job worker for job work.
Q.7 Whether principal can avail ITC for inputs/ capital goods directly send to the job worker without bringing them to his premises?
Ans: Yes, he can still avail the ITC on such inputs/ capital goods (Section 19).
Responsibility for keeping accounts for inputs/ capital goods
Q.8 Who is responsible for the keeping accounts for inputs/ capital goods related to job work?
Ans: The responsibility for keeping proper accounts for the inputs or capital goods lies with the principal.
Requirement to generate E-way bill
Q.9 Whether E-way bill needs to be generated for sending goods to job work?
Ans: Yes.
As per Rule 138 of CGST rules e- way bill needs to be generated by every registered person who causes movement of goods of consignment value exceeding Rs 50000.
Further as per rule 138 of CGST rules, in case of job work, e-way bill shall be generated either by the principal or by the registered job worker irrespective of the value of the consignment, where goods are sent by a principal located in one state/ union territory to a job worker located in any other state/ union territory.
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