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Job Work under GST: Provisions, Procedures, and Compliance Requirements for Principals and Job-Workers

Understanding Job Work under GST: Everything You Need to Know

Job work plays a crucial role in various industries, involving the processing of goods by one registered person on behalf of another. In the realm of Goods and Services Tax (GST), job work entails specific provisions and procedural aspects that both principals and job-workers must adhere to. Let's delve deeper into the nuances of job work under GST.

What is Job Work under GST? Job work, as defined by Section 2(68) of the CGST Act, 2017, refers to any treatment or process undertaken by a person on goods belonging to another registered person. The individual performing the job work is termed the 'job-worker', while the ownership of the goods remains with the principal.

Procedural Aspects of Job Work: Under GST, several facilities are extended concerning job work, subject to certain conditions:

Sending Goods to Job-Worker: Principals can send inputs or capital goods to a job-worker without payment of tax, under intimation and specific conditions. The principal is not required to reverse the Input Tax Credit (ITC) availed on such goods.

Direct Dispatch to Job-Worker: Principals can directly dispatch inputs or capital goods to the job-worker without bringing them to their premises, while still availing ITC on tax paid.

Time Limits for Return: Goods sent for job work must be returned to the principal within one year for inputs and three years for capital goods from the date of dispatch, extendable by the Commissioner under certain conditions.

Supply of Processed Goods: After processing, job-workers can supply goods to another job-worker, the principal's place of business, or for export under specified conditions.

Input Tax Credit on Goods Sent for Job Work: Principals are entitled to claim input tax credit on inputs sent to job-workers for processing, even when goods are directly supplied without being brought to the principal's premises.

Responsibilities and Compliance:

• Principals must intimate the Jurisdictional Officer before supplying goods for job work, including details of inputs and processing.
• Goods sent to job-workers must be accompanied by a challan issued by the principal, containing specified details.
• Principals are responsible for maintaining proper accounts of inputs or capital goods sent for job work.

Time Limits for Return of Processed Goods: Processed goods must be returned to the principal within stipulated time frames, except for certain exceptions like moulds and dies.

Extended Meaning of Input: Processes carried out on inputs before their removal to job-workers result in intermediate products, also covered under the definition of input.