GST : Important FAQs on JOB WORK

Job work is an significant industry in economy. The manufacturing industry now-a-days is mostly depends on the job worker. So we are here with our new relevant topic with would definitely help you in understating the taxation provision on job work. As we all know, in job work principal send goods to job worker without payment of tax.

Job work” means undertaking any treatment or process by a person on goods belonging to another registered taxable person and the expression “job worker” shall be construed accordingly.

Principal” means a person who is sending goods .he should be a registered person.

Now following questions are arisen in mind as a job worker or while doing business with job worker.

  1. Will value of goods supplied by principal be included in turnover of Job worker?

No, as it shall be included in Principal turnover.

  1. How will turnover be calculated?

GST has provided an exemption to small persons having turnover of 20/10 lakhs, so while calculating turnover material supplied by principal will not be included, only job worker service part will be considered.

  1. Can intermediate products be sent for job work?

Yes,  for the purpose of job work, input includes intermediate goods.

  1. Is it necessary to bring input first in principal place and send thereafter to the job worker?

No,  it can send directly from the place of input supplier to jobworker.

  1. Which goods can be sent for job work.

 Input and capital goods can be sent for job work.

  1. When should input or capital goods be brought back?

Input and capital goods shall be brought back within a period of 1 year and 3 years, respectively.

  1. Can goods be dispatched directly from the place of job worker?

Yes.  Goods can be sent, even such goods can export directly from the place of job worker.

  1. Who is responsible for tax?

It is the principal responsibility to pay tax.

  1. What if input and capital goods are not returned within 1/3 years?

GST shall be payable as if goods and capital goods were supplied by principal to job worker and delivery challan shall be deemed to be an invoice.

  1. Can input tax credit be claimed if goods sent out to job worker?

Yes, but subject to conditions as may be prescribed.

Note:- Delivery challan may be issued by consigner instead of tax invoice. Delivery challan shall be prepared in triplicate.

  1. What if goods sent to job worker prior to 01/07/2017 and returned after 01/07/2017?

GST will not be payable If goods sent out to job worker before 01/07/2017 and received back before 31/12/2017.

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