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We have already discussed about Job Work and provisions relating to it under GST. And we have also talked about impact of GST on jewellery sector. Job Work is a very common practice in this industry. So let us see what GST holds for job work in gold manufacturing.
Sending out goods for further processing is commonly called Job Work and this practice is very common in jewellery industry. Gold dealers often send out gold to job workers or ‘karigars’ to make ornaments out of them as per customer’s demands.
Following are the points that are note worthy in relation to job work in case of gold manufacturing –
· If a “Karigar” is also registered under GST then registered jeweller will recover GST on making charges from 'karigar'. But if “Karigar” is not registered then jewellers will have to pay tax on making charges paid to “Karigar”.
· In case of repair of jewellry, GST will be applied on repairing charges only. However if some gold is added while repairing goods, GST will be paid on additional gold used for repairing.
· Whenever issuing goods to ‘karigars’ for any work, a voucher must be prepared for the same or else goods are at risk of being confiscated.
· Sometimes, one “karigar” directly send goods to another “Karigar” in that case also voucher must be prepared or goods might be confiscated.
· Job worker must get himself registered under GST because if he is not registered tax is to be paid by the jeweller for all job work done by job worker.
· While sending goods to job worker or for hallmarking, and also while receiving back goods, an e-way bill must be prepared which will accompany the goods in transit. (E-way bill facility is not yet operational and will come into force later this year)