Job work Procedure Section 143 - GST Ready Reckoner - GST

Job work Procedure Goods Send for job work A registered person (principal) may under intimation and subject to such conditions as may be prescribed, send inputs or capital goods for job work, without payment of tax, to a job worker and from there subsequently send to another job worker Process After completion of job work Further to this after the completion of job work on the goods shall be: brought back inputs or capital goods, other than moulds and dies, jigs and fixtures, or tools, within one year and three years, respectively, of their being sent out, to any of his place of business , without payment of tax; OR supply such inputs or capital goods, other than moulds and dies, jigs and fixtures, or tools, within one year and three years, respectively, of their being sent out from the place of business of a job worker on payment of tax within India, or with or without payment of tax for export, as the case may be: The principal shall not supply the goods from the place of business of a job worker in accordance with the provisions of this clause unless the said principal declares the place of business of the job worker as his additional place of business except in a case - (i) where the job worker is registered under section 25; or (ii) where the principal is engaged in the supply of such goods as may be notified by the Commissioner. The period of one year and three years may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding one year and two years respectively. Read with rule 45 of the CGST Rules, 2017 - Conditions and restrictions in respect of inputs and capital goods sent to the job worker [ For more details refer this chapter ] Accountability fo maintaining account of goods lies with the Principal As Per section 143(2) , The responsibility for keeping proper accounts for the inputs or capital goods shall lie with the principal. including payment of tax thereon shall lie with the principal . Like 1. E-way bill 2. Delivery challan issued 3. Purchase invoice which sent to directly to job worker 4. Detail of Stock which send to job worker 5. Conveyance details 6. Job work invoice issued by job worker etc. Consequences if inputs/capital goods not received back within time - constituted as deemed supply As per section 143(3) (4) Where the inputs sent for job work are not received back within the time limit mentioned in sub-section (1) above or are not supplied from the place of the job worker within the time limit of one year , it shall be deemed that such inputs had been supplied by the principal to the job worker on the day when the said inputs were sent out. Where the capital goods , other than moulds and dies, jigs and fixtures, or tools, sent for job work are not received back within the time limit mentioned in sub-section (1) above or are not supplied from the place of the job worker within the time limit of three years , it shall be deemed that such capital goods had been supplied by the principal to the job worker on the day when the said capital goods were sent out. A n y waste and scrap generated during the job work may be supplied by the job worker directly from his place of business on payment of tax, , As per section 143(5) if such job worker is registered, or by the principal, if the job worker is not registered. Explanation . For the purposes of job work, input includes intermediate goods arising from any treatment or process carried out on the inputs by the principal or the job worker. Important Point Clarifications regarding applicability of GST 1. Whether job work for processing of Barley into Malted Barley attracts GST @ 5% as applicable to job work in relation to food and food products or 18% as applicable on job work in relation to manufacture of alcoholic liquor for human consumption . [ Circular No. 206/18/2023-GST dated 31.10.2023 ] References have been received to clarify whether services by way of job work for conversion of barley into malt attracts GST at 5% prescribed for job work in relation to all food and food products falling under Chapter 1 to 22 of the customs tariff or at the rate of 18% prescribed for services by way of job work in relation to manufacture of alcoholic liquor for human consumption . Malt is a food product. It can be directly consumed as part of food preparations or can be used as an ingredient in food products and also used for manufacture of beer and alcoholic liquor for human consumption. However, irrespective of end-use, conversion of barley into malt amounts to job work in relation to food products. It is hereby clarified that job work services in relation to manufacture of malt are covered by the entry at Sl. No. 26 (i) (f) which covers job work in relation to all food and food products falling under chapters 1 to 22 of the customs tariff irrespective of the end use of that malt and attracts 5% GST.