Job Work Simplified
Job Work Simplified
When you make some other person do work on your goods, it is called Job Work. Work may include any treatment or process on the goods. And any person who does this is called Job Worker. Now let us see how this is dealt under GST.
Section 2(68) of CGST Act, 2017, defines the term 'job work' to mean undertaking any treatment or process on the goods belonging to another registered taxable person.
If you buy some goods, and then send them to another person to work on it, say polish the goods. It is called as Job Work. And the person, who will polish, is called Job Worker.
In terms of section 143(1) of CGST Act, a registered taxable person can send any inputs and/or capital goods without payment of tax to a job worker as well as clear to subsequent job worker under the cover of a Delivery challan provided:
a) Such goods (other than moulds and dies, jigs and fixtures or tools) must be received back to any of his place of business within one year (in case of inputs) and within 3years (in case of capital goods), of being sent out.
b) Such goods (other than moulds and dies, jigs and fixtures or tools) must be supplied from the place of business of the job worker on payment of tax within India or with or without payment of tax for export, within one year (in case of inputs) and within 3 years (in case of capital goods), of being sent out.
If you buy goods and send them to a job worker along with a delivery challan, no tax would be payable .. but.. you have to make sure that you receive those inputs back within 1 year from the date when you send them.
And if you send capital goods to job worker, you must make sure to receive them back within 3 years.
The delivery challan shall contain the details specified in Rule 10 of the Invoice Rules and shall be prepared in triplicate, in the following manner, namely:–
i. The Original Copy Being Marked As ORIGINAL FOR CONSIGNEE;
ii. The Duplicate Copy Being Marked As DUPLICATE FOR TRANSPORTER
iii. The Triplicate Copy Being Marked As TRIPLICATE FOR CONSIGNER.
The principal is not required to reverse the ITC availed on inputs or capital goods dispatched to job-worker.
You buy some inputs by paying GST and them send those inputs to job worker.. in such a case you can claim ITC of the GST paid.
Before supply the goods to job worker, the principal would be required to inform the Jurisdictional Officer about the nature of inputs being sent and the kind of work which job worker will do.
According to rule 45 of CGST Rules, the details of challans in respect of which goods are sent to or received from job worker shall be included in Form ITC-04.
If inputs are not received back by principal within 1 year or capital goods within 3 years, it will be deemed as supply by the principal and he would be required to declare such supply in form GSTR-01 and also pay tax.
