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TMI BlogClarification on issues related to Job Work.X X X X Extracts X X X X X X X X Extracts X X X X ..... capsulates the provisions related to job work, provides that the registered principal may, without payment of tax, send inputs or capital goods to a job worker for job work and, if required, from there subsequently to another job worker and so on. Subsequently, on completion of the job work (by the last job worker), the principal shall either bring back the goods to his place of business or supply (including export) the same directly from the place of business/premises of the job worker within one year in case of inputs or within three years in case of capital goods (except moulds and dies, jigs and fixtures or tools). 3. It may be noted that the responsibility of keeping proper accounts of the inputs and capital goods sent for job work lies with the principal. Moreover, if the time frame of one year / three years for bringing back or further supplying the inputs / capital goods is not adhered to, the activity of sending the goods for job work shall be deemed to be a supply by the principal on the day when the said inputs / capital goods were sent out by him. Thus, essentially, sending goods for job work is not a supply as such, but it acquires the character of supply only when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tration by job workers when they are located in the same State where the principal is located or when they are located in a State different from that of the principal. It may be noted that the job worker is required to obtain registration only if his aggregate turnover, to be computed on all India basis, in a financial year exceeds the specified threshold limit (i.e. ₹ 20 lakhs or ₹ 10 lakhs in case of special category States except Jammu Kashmir) in case both the principal and the job worker are located in the same State. Where the principal and the job worker are located in different States, the requirement for registration flows from clause (i) of section 24 of the Goa GST Act which provides for compulsory registration of suppliers making any inter-State supply of services. However, exemption from registration has been granted in case the aggregate turnover of the inter-State supply of taxable services does not exceed ₹ 20 lakhs or ₹ 10 lakhs in case of special category States except Jammu Kashmir in a financial year vide notification No. 10/2017-Integrated Tax dated 13.10.2017. Therefore, it is clarified that a job worker is required to obtain regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usand rupees even in cases where such movement is for reasons other than for supply (e.g. in case of movement for job work). Further, the third proviso to rule 138(1) of the Goa GST Rules provides that the e-way bill shall be generated either by the principal or by the registered job worker irrespective of the value of the consignment, where goods are sent by a principal located in one State/Union territory to a job worker located in any other State/ Union territory. 8.3 As mentioned above, rule 45 of the Goa GST Rules provides that inputs, semi-finished goods or capital goods shall be sent to the job worker under the cover of a challan issued by the principal, including in cases where such goods are sent directly to a job worker. Further, rule 55 of the Goa GST Rules provides that the consignor may issue a delivery challan containing the prescribed particulars in case of transportation of goods for job work. It may be noted that rule 45 provides for the issuance of a challan by the principal whereas rule 55 provides that the consignor may issue the delivery challan. It is also important to note that as per the provisions contained in rule 138 of the Goa GST Rules, an e-way bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the principal while returning the goods to the principal after carrying out the job work. (iv) Where the goods are sent directly by the supplier to the job worker: In this case, the goods may move from the place of business of the supplier to the place of business/premises of the job worker with a copy of the invoice issued by the supplier in the name of the buyer (i.e. the principal) wherein the job worker's name and address should also be mentioned as the consignee, in terms of rule 46(o) of the Goa GST Rules. The buyer (i.e., the principal) shall issue the challan under rule 45 of the Goa GST Rules and send the same to the job worker directly in terms of para (i) above. In case of import of goods by the principal which are then supplied directly from the customs station of import, the goods may move from the customs station of import to the place of business/premises of the job worker with a copy of the Bill of Entry and the principal shall issue the challan under rule 45 of the Goa GST Rules and send the same to the job worker directly. (v) Where goods are returned in piecemeal by the job worker: In case the goods after carrying out the job work, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting to the issuance of an invoice are contained in section 31 of the Goa GST Act read with rule 46 of the Goa GST Rules. 9.4 On conjoint reading of all the provisions, the following is clarified with respect to the issuance of an invoice, time of supply and value of supply: (i) Supply of job work services: The job worker, as a supplier of services, is liable to pay GST if he is liable to be registered. He shall issue an invoice at the time of supply of the services us determined in terms of section 13 read with section 31 of the Goa GST Act. The value of services would be determined in terms of section 15 of the Goa GST Act and would include not only the service charges but also the value of any goods or services used by him for supplying the job work services, if recovered from the principal. Doubts have been raised whether the value of moulds and dies, jigs and fixtures or tools which have been provided by the principal to the job worker and have been used by the latter for providing job work services would be included in the value of job work services. In this regard, attention is invited to section 15 of the Goa GST Act which lays down the principles for determining th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will be an inter-State supply. In case the recipient is also located in State A, it will be an intra-State supply. (iii) Supply of waste and scrap generated during the job work: Sub-section (5) of Section 143 of the Goa GST Act provides that the waste and scrap generated during the job work may be supplied by the registered job worker directly from his place of business or by the principal in case the job worker is not registered. The principles enunciated in para (ii) above would apply mutatis mutandis in this case. 9.5 Violation of conditions laid down in section 143: As per the provisions contained in section 143 of the Goa GST Act, if the inputs or capital goods (other than moulds and dies, jigs and fixtures or tools) are neither received back by the principal nor supplied from the job worker's place of business within the specified time period, the inputs or capital goods (other than moulds and dies, jigs and fixtures or tools) would be deemed to have been supplied by the principal to the job worker on the day when such inputs or capital goods were sent out to the first job worker. 9.6 Thus, if the inputs or capital goods are neither returned nor supplied ..... X X X X Extracts X X X X X X X X Extracts X X X X
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