On completion of this lesson, you will be able to understand:
· Meaning of Job Work
· Supply of Goods to a Job Worker
· E-way Bill for Job Work
· Input Tax Credit on Job Work
· Goods not received back.
Please go through the First Video of the Chapter 9.
“Job-work” means undertaking any treatment or process by a person on goods belonging to another registered taxable person.
The expression “job-worker” shall be construed accordingly means the person doing job work. The definition of job work reflects the change in basic scheme of taxation relating to job-work in the GST regime.
Supply of goods to a Job Worker
The goods sent by a taxable person to a job-worker will not be treated as supply and liable to GST.
The supply of goods by a registered taxable person (principal) to a job worker shall not be regarded as supply of goods. Therefore, it can be inferred that no GST shall be applicable on the goods supplied by the registered principal to a job-worker.
The registered taxable person (principal) can send the taxable goods to a job-worker for job-work without payment of tax. He can further send the goods from one job-worker to another job-worker and so on subject to certain conditions.
Procedure for sending the goods
· The inputs or capital goods shall be sent to the job worker under the cover of a challan issued by the principal.
· The challan shall contain the details specified in Rule 10 of the Invoice Rules. The responsibility for keeping proper accounts for the inputs or capital goods shall lie with the principal.
· The consigner (Principal) may issue a delivery challan, serially numbered not exceeding sixteen characters, in one or multiple series, in lieu of invoice at the time of removal of goods for transportation.
· It should contain the following details, namely
a) Date and number of the delivery challan
b) Name, address and Goods and Services Tax Identification Number of the consigner, if registered;
c) Name, address and Goods and Services Tax Identification Number or Unique Identity Number of the consignee, if registered;
d) Harmonised System of Nomenclature code and description of goods;
e) Quantity (provisional, where the exact quantity being supplied is not known) taxable value tax rate and tax amount - central tax, State tax, integrated tax, Union territory tax or cess, where the transportation is for supply to the consignee;
f) Place of supply, in case of inter-State movement; and signature.
The delivery challan shall be prepared in triplicate, in case of supply of goods, in the following manner, namely:-
(a) The original copy being marked as ORIGINAL FOR CONSIGNEE;
(b) The duplicate copy being marked as DUPLICATE FOR TRANSPORTER; and (c) The triplicate copy being marked as TRIPLICATE FOR CONSIGNER.
E-way Bill for Job Work
As per GST provisions on e-way bill, e-way bill must be generated by every registered person who causes movement of goods of consignment value exceeding fifty thousand rupees even in cases where such movement is for reasons other than for supply.
Hence even in case of movement of goods for job work, e-way bill must be generated. In case of interstate movement of goods, e-way bill should be generated either by the principal manufacturer or by the registered job worker irrespective of the value of the consignment.
Input Tax Credit
Principal shall be entitled to take credit of tax paid on inputs or capital goods sent for job-work.
Principal shall be entitled to take credit of inputs sent to a job-worker if the said inputs, after completion of job-work are received back in 180 days from the date of being sent out. In case the inputs are sent directly to the job-worker, the date shall be counted from the date of receipt of inputs by job-worker.
Capital goods should be received back within 2 years from the date of being sent.
Goods not received back within prescribed period
Further an amount equivalent to the input tax credit availed on such inputs has to be paid along with interest, in case the inputs are not received back within the specified time.
The credit can be reclaimed when the inputs are actually received back.