4. job work under gst

Job work under GST

1. 6/23/2017Rajan Naidu

2. Job
work
Definition –
Section 2(68)
Registration –
Section 22
Input Tax Credit
–Section 19
and Rule 10
Procedure –
Section 143
Transactional
provisions
Reconciliations
and others
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3. What is the Job work
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The activity undertaken by small industries to completethe process on raw
material/semi-finished goods as desired by principal manufacturer is known as "Job
Work".
It has various nomenclatures 1. "job work" or "sub-contracting" in
engineering or FMCG industry,
2. "processing" in chemical or textile
industry
3. loan licensee" in pharmaceutical
industry.

4. Definition –Section 2(68)
“jobwork”meansanytreatmentorprocessundertakenbyapersonon
goodsbelongingtoanotherregisteredpersonandtheexpression“jobworker”
shallbeconstruedaccordingly
6Include all activities or process whether relates t o manufacturing or any
operation to complete the process.
6Goods belongs to Registered Person.
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5. Registration –Section 22
1. Jobwork’isaservice,
2. the job worker would be required to obtain
registration
3. ifhisaggregateturnoverexceedstheprescribed
thresholdRs.20lakh,
4. incaseNERs.10lakh)
Explanation(ii)toSection22:thesupplyofgoods,aftercompletionofjobwork,bya
registeredjobworkershallbetreatedasthesupplyofgoodsbytheprincipalreferred
to in section 143, and the value of such goods shall not be incl uded in the aggregate
turnoveroftheregisteredjobworker;
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6. Applicability of Provisions
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1.1.1. 1. The provisions relating to job work are applicabl e only The provisions relating to job work are applicable only The provisions relating to job work are applicable only The provisions relating to job work are applicable only when when when when registered taxable registered taxable registered taxable registered taxable
person intends to send taxable goods person intends to send taxable goods person intends to send taxable goods person intends to send taxable goods. ...
In In In In other words, these provisions are not applicable to exempted or non other words, these provisions are not applicable to exempted or non other words, these provisions are not applicable to exempted or non other words, these provisions are not applicable to exempted or non----taxable taxable taxable taxable
goods or when the sender is a person other than reg istered taxable person. goods or when the sender is a person other than reg istered taxable person. goods or when the sender is a person other than reg istered taxable person. goods or when the sender is a person other than reg istered taxable person.

7. Applicability of Provisions
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1.1.1. 1. ItItIt Itisisis isnotnotnotnotcompulsory compulsory compulsory compulsorythat thatthat thatjobjobjob jobwork workwork workprovisions provisions provisions provisionsshould should should shouldbebebe befollowed followed followed followedbybyby bythethethetheprincipal principal principal principal....
a.a.a. a. TheTheTheThe principal principal principal principal can cancancan send sendsend send thethethethe inputs inputs inputs inputs ororor or capital capital capital capital goods goods goods goods after after after after payment payment payment payment ofofof of GSTGSTGSTGST without without without without
following following following followingthe thethethespecial special special specialprocedure procedure procedure procedure....
b.b.b. b. InInIn In such suchsuch such aaaa case, case, case, case, the thethethe jobjobjob job----worker worker worker worker would would would would take taketake take the thethethe input input input input tax taxtax tax credit credit credit credit and andandand supply supply supply supply back backback back thethethethe
processed processed processed processedgoods goods goods goods(after (after (after (aftercompletion completion completion completionofofof ofjobjobjob job----work) work) work) work)ononononpayment payment payment paymentofofof ofGSTGSTGSTGST....

8. Input Tax Credit –Section 19
ProvisionInputTax Credit
Section 19 (1) Principal shall be allowed input tax credit on inputs sent to a job worker for job work
Section 19 (2) principal shall be entitled to take credit of input tax on inputs even if the inputs are directly sent to a
job worker for job work without being first brought to his place of business
Section 19 (3) inputs sent for job work are not received back by the principal within one year it shall be deemed that
such inputs had been supplied by the principal to t he job worker
Section 19 (4) principal shall be allowed input tax credit on capital goods sent to a job worker for jo b work
Section 19 (5) principal shall be entitled to take credit of input tax on capital goods even if the cap ital goods are
directly sent to a job worker for job work without being first brought to his place of business
Section 19 (6) Capital goods sent for job work are not received back by the principal within three year it shall be
deemed that such inputs had been supplied by the pr incipal to the job worker.
Section 19 (7) Exception for dies, jigs and fixtures, or tools sent out to a job worker for job work
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9. Input Tax Credit –Rule10 of ITC Rules
Conditions and restrictions in respect of inputs an d capital goods sent
to the job worker
1.1.1. 1. TheTheTheTheinputs, inputs, inputs, inputs, semi semisemi semi----finished finished finished finishedgoods goods goods goodsororor orcapital capital capital capital goods goods goods goodsshall shall shall shall bebebe besentsentsent sent totototothethethe thejobjobjob job worker worker worker worker under under under underthethethe thecover cover cover cover
ofofof ofaaaachallan challan challan challanissued issued issued issuedbybyby bythethethe theprincipal, principal, principal, principal,including including including includingwhere where where wheresuchsuchsuch suchgoods goods goods goodsareareare aresent sentsent sentdirectly directly directly directlytotototoaaaajobjobjob job----worker worker worker worker....
2.2.2. 2. TheTheTheThe challan challan challan challan issued issued issued issued bybyby by thethethe the principal principal principal principal to toto to thethethe the jobjobjob job worker worker worker worker shall shall shall shall contain contain contain contain the thethe the details details details details specified specified specified specified in ininin rule rulerule rule
Invoice Invoice Invoice Invoice....101010 10::::
3.3.3.3. TheTheTheThe details details details details of ofof of challans challans challans challans in inin in respect respect respect respect ofofof of goods goods goods goods dispatched dispatched dispatched dispatched totototo aaaa jobjobjob job worker worker worker worker orororor received received received received from fromfrom from aaaa jobjobjob job
worker worker worker workerduring during during duringaaaataxtaxtax taxperiod period period periodshall shall shall shallbebebe beincluded included included includedininin inFORM FORMFORM FORMGSTR GSTRGSTR GSTR----1111furnished furnished furnished furnishedfor forfor forthat thatthat thatperiod period period period....
4.4.4. 4. Where Where Where Wherethethethe theinputs inputs inputs inputsororor orcapital capital capital capital goods goods goods goodsareareare arenotnotnotnot returned returned returned returnedtototo tothethethe theprincipal principal principal principal within within within withinthethethe thetimetimetime timestipulated stipulated stipulated stipulatedinininin
section section section section 143 143143143,,,, thethethe the challan challan challan challan issued issued issued issued under under under under subsubsubsub----rule rulerule rule ((((1111)))) shall shall shall shall bebebebe deemed deemed deemed deemed totototo bebebebe anananan invoice invoice invoice invoice for forfor for the thethe the
purposes purposes purposes purposesofofof ofthethethe theActActActAct....
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10. Procedure –Section 143
ProvisionsJob work procedure
Section 143 (1) A registered person may under intimation send any inputs or capital goods, without payme nt of tax,
to a job worker for job work
Section 143 (1a) bring back inputs or capital goods, after completion of job work with in one year or th ree years
respectively with out payment of duty
Section 143 (2) the responsibility for keeping proper accounts for the inputs or capital goods shall lie with the
principal
Section 143 (3) inputs sent for job work are not received back by the principal after completion of job work within a
period of one year, it shall be deemed that such in puts had been supplied by the principal to the job
worker
Section 143 (4) Capital goods sent for job work are not received back by the principal after completion of job work
within a period of three year, it shall be deemed t hat such capital goods had been supplied by the
principal to the job worker
Section 143 (5) Any waste and scrap generated during the job work may be supplied by the job worker dir ectly from
his place of business on payment of tax, if such jo b worker is registered, or by the principal, if the job
worker is not registered
Section 143 (5) Explanation.––For the purposes of job work, input includes intermediate goods
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11. •
Inputs sent to job worker before the appointed day and is received back
from job worker after the appointed day, NO GST sha ll be payable if
received within 6 months from appointed day which m ay further be
extended to 2 months by commissioner.
•
If goods are not received back in 6 + 2 months CCR claimed on such inputs
in previous shall also be recovered.
Section 141(1) input sent to job worker
before appointed day
Transactional provisions

12. •
Semi SemiSemi Semi finished finished finished finished goods goods goods goods sent sentsent sent tototo to jobjobjob job worker worker worker worker before before before before thethethethe appointed appointed appointed appointed daydaydayday andandandand isisis is
received received received received back backback back from fromfrom fromjobjobjob job worker worker worker worker after after after after the thethethe appointed appointed appointed appointed day, day,day, day, NONONO NO GSTGSTGSTGST shall shall shall shall bebebe be
payable payable payable payableififif if received received received receivedwithin within within within6666months months months months from fromfrom fromappointed appointed appointed appointed day daydaydaywhich which which whichmaymaymaymayfurther further further furtherbebebe be
extended extended extended extendedtototo to2222months months months monthsbybyby bycommissioner commissioner commissioner commissioner....
•
IfIfIf If goods goods goods goods areareareare notnotnotnot received received received received back backback back ininin in 6666 ++++ 2222 months months months months CCRCCRCCRCCR claimed claimed claimed claimed ononon on inputs inputs inputs inputs
contained contained contained containedininin insuch suchsuch suchsemisemisemi semifinished finished finished finishedgoods goods goods goodsininin inprevious previous previous previousshall shall shall shallalso alsoalso alsobebebe berecovered recovered recovered recovered....
•
Goods Goods Goods Goods maymaymaymay cleared cleared cleared cleared from fromfrom fromthethethethe jobjobjob job worker worker worker worker premises premises premises premises tototo to anyanyanyany other other other other registered registered registered registered
person person person personononon onpayment payment payment paymentofofof ofGSTGSTGSTGSTororor ormaymaymaymaybebebe beexported exported exported exportedwithout without without withoutpayment payment payment paymentofofof ofGSTGSTGSTGST....
Section 141(2) Semi finished goods sent
to job worker before appointed day
Transactional provisions

13. •
Finished Finished Finished Finished goods goods goods goods sent sentsent sent tototo to jobjobjob job worker worker worker worker before before before before the thethethe appointed appointed appointed appointed day daydayday andandandand isisis is received received received received
back backback back from fromfrom fromjobjobjob job worker worker worker worker after after after after the thethethe appointed appointed appointed appointed day, day,day, day, NONONO NO GSTGSTGSTGST shall shall shall shall bebebe be payable payable payable payable ififif if
received received received received within within within within 6666 months months months months from fromfrom fromappointed appointed appointed appointed day daydayday which which which which maymaymaymay further further further further bebebe be extended extended extended extended
tototo to2222months months months monthsbybyby bycommissioner commissioner commissioner commissioner....
•
IfIfIf If goods goods goods goods areareareare notnotnotnot received received received received back backback back ininin in 6666 ++++ 2222 months months months months CCRCCRCCRCCR claimed claimed claimed claimed ononon on inputs inputs inputs inputs
contained contained contained containedininin insuch suchsuch suchsemisemisemi semifinished finished finished finishedgoods goods goods goodsininin inprevious previous previous previousshall shall shall shallalso alsoalso alsobebebe berecovered recovered recovered recovered....
•
Goods Goods Goods Goods maymaymaymay cleared cleared cleared cleared from fromfrom fromthethethethe jobjobjob job worker worker worker worker premises premises premises premises tototo to anyanyanyany other other other other registered registered registered registered
person person person personononon onpayment payment payment paymentofofof ofGSTGSTGSTGSTororor ormaymaymaymaybebebe beexported exported exported exportedwithout without without withoutpayment payment payment paymentofofof ofGSTGSTGSTGST....
Section 141(3) Finished goods sent to job
worker before appointed day
Transactional provisions

14. •
Condition Condition Condition Condition for Section 141(1), 141(2) & 141(3) & Rule 2 of Tra nsactional Provision for Section 141(1), 141(2) & 141(3) & Rule 2 of Transactional Provision for Section 141(1), 141(2) & 141(3) & Rule 2 of Transactional Provision for Section 141(1), 141(2) & 141(3) & Rule 2 of Transactional Provision
•
Both Job worker and principal manufacture have to d eclare the stock held by Both Job worker and principal manufacture have to d eclare the stock held by Both Job worker and principal manufacture have to d eclare the stock held by Both Job worker and principal manufacture have to d eclare the stock held by
job worker on the appointed day in such form and ti me as may be prescribed. job worker on the appointed day in such form and ti me as may be prescribed. job worker on the appointed day in such form and ti me as may be prescribed. job worker on the appointed day in such form and ti me as may be prescribed.
Section 141(4) -Declaration
Transactional provisions

15. Responsibility for Record
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ItItIt It isisis is completely completely completely completely the thethethe responsibility responsibility responsibility responsibility of ofof of thethethethe principal principal principal principal to tototo
maintain maintain maintain maintain proper proper proper proper accounts accounts accounts accounts ofofof of jobjobjob job work workwork work related related related related inputs inputs inputs inputs
andandandandcapital capital capital capitalgoods goods goods goods....

16. Reconciliation of Inward and Outward Supplies
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IfIfIf Ifthere there there thereisisis isaaaamismatch mismatch mismatch mismatchbetween between between betweenthethethethedetails details details detailsofofof of
6outward outward outward outwardsupplies supplies supplies supplies
6andandandandinward inward inward inwardsupply supply supply supply
andandandand notnotnotnot rectified rectified rectified rectified in inin in thethethethe month month month month ofofof of communication, communication, communication, communication, thethethethe
recipient recipient recipient recipient is isis is liable liable liable liable to toto to paypaypaypay thethethethe GSTGSTGSTGST along along along along with withwith with interest interest interest interest in ininin thethethethe
subsequent subsequent subsequent subsequentmonth month month month

17. Location of job worker and principal manufacturer
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In respect to location of Both parties, it is not r equired to be situated at one In respect to location of Both parties, it is not r equired to be situated at one In respect to location of Both parties, it is not r equired to be situated at one In respect to location of Both parties, it is not r equired to be situated at one
state. state. state. state.
Provisions Provisions Provisions Provisions relating to job work have been adopted i n the IGST Act as well as relating to job work have been adopted in the IGST Act as well as relating to job work have been adopted in the IGST Act as well as relating to job work have been adopted in the IGST Act as well as
in UTGST Act in UTGST Act in UTGST Act in UTGST Act ((((
CHAPTER CHAPTER CHAPTER CHAPTER IX ,MISCELLANEOUS), IX ,MISCELLANEOUS), IX ,MISCELLANEOUS), IX ,MISCELLANEOUS),
Hence Hence Hence Hence jobjobjob job----worker worker worker worker and principal can be located and principal can be located and principal can be located and principal can be located
a.a.a. a. either either either either is same State is same State is same State is same State
b.b.b. b. or or or or in same Union Territory in same Union Territory in same Union Territory in same Union Territory
c.c.c. c. or or or or in different States in different States in different States in different States
d.d.d. d. or or or or Union Territories Union Territories Union Territories Union Territories

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