TRANSITIONAL PROVISIONS RELATING TO JOB WORK, GOODS RETURNED/SENT FOR APPROVAL ETC. - Handbook of GST Law & Procedures (CBIC) [October 2024] - GST

4. TRANSITIONAL PROVISIONS RELATING TO JOB WORK, GOODS RETURNED/SENT FOR APPROVAL ETC. 4.1. Job work:- Inputs, semi-finished goods or finished goods were sent to the job worker or any other premises without payment of duty/VAT under the existing law. No GST is payable by the job worker when such goods are returned by him within six months from 01.07.2017. The period, on sufficient cause being shown, can be extended by the Commissioner, GST for a further period not exceeding two months. If not returned within the prescribed period, then ITC shall be liable to be recovered from the principal according to Section 142 (8) (a) of the CGST Rules, 2017 as per second proviso to Section 141(1) of the CGST Act, 2017. In addition, the job worker will have to pay the GST on such supplies. In case of semi-finished goods, the manufacturer may transfer the goods to premises of a registered person without payment of tax within the prescribed period. In case of finished goods, the manufacturer may transfer the goods on payment of tax or clear for export within the prescribed period. 4.2. Goods removed before 6 months of the appointed day i.e. 1st July, 2017 but returned within 6 months from 1st July, 2017: If such goods are returned by an unregistered person, then refund of the duty/VAT paid under existing law can be claimed. If returned by a registered person, then return of goods shall be treated as supply of goods. ITC can be claimed. 4.3. Goods sent on approval basis before 6 months of the appointed day i.e. 1st July, 2017 but returned within 6 months from 1st July, 2017: No tax is payable by the person returning the goods. Commissioner may extend for a further period not exceeding two months. If returned after that, tax is payable if the supply is taxable under GST by the recipient. If not returned, tax is payable by the person who sent the goods on approval basis. 4.4. TDS deducted in VAT: A supplier had made sale of goods and tax was required to be deducted under VAT Act and Invoice was issued before the appointed day, however, the payment was made on or after appointed day. In such cases no TDS under GST is to be deducted. 4.5. Price revision in respect of existing contracts: In case of upward price revision, a registered person will issue a supplementary invoice or debit notes within 30 days from the date of revision and such revision shall be treated as supply under GST and tax is payable under this Act. In case of downward revision, registered person may issue credit note within 30 days from such revision and credit note shall be deemed to have been issued in respect of outward supply made under this Act. A registered person will reduce his tax liability for such credit note subject to reversal of credit by the recipient. 4.6 . Proceedings under the existing laws: GST law has become operational w.e.f. 1st July, 2017 and existing laws have been repealed. Elaborate provisions have been made to save the pending as well future claims relating to existing law made before, on or after the appointed day i.e. 1st July, 2017. Such proceedings may pertain to refund claims of CENVAT credit/VAT or export related rebate or service tax, such proceedings may either result in recovery of tax or refund. All such cases would be disposed of under the existing law. If any claim for refund of CENVAT credit is fully or partially rejected, the amount so rejected shall lapse. Refund of CENVAT credit shall be paid in cash. There will be no refund of CENVAT credit if already carry forwarded. If any amount becomes recoverable, the same shall be recovered as arrear of tax under GST Act.