ITC-04 Filing online with ITC process on Job work

Last Updated On: Nov. 29, 2020, 8:30 p.m.
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ITC 04 FILING ONLINE WITH ITC PROCESS ON JOB WORK

Job work is defined as the process which is undertaken on goods by a person that belongs to another registered person. The ownership of goods does not shift to the job-worker but it remains with the main manufacturer. The work of the job worker is to carry out the process which is given by the main manufacturer on the goods that are supplied to him.

The person who is doing job work is called a job worker.

For example- a big belt manufacturer (principal) sends out the half-made belts (upper part) to the smaller manufacturers (job worker) to punch the hole. The smaller manufacturers (job worker) send back the belts to the big manufacturer (principal).

 

Input Tax Credit (ITC) on Job Work

The principal manufacturer can avail the ITC paid on the purchase of goods sent on job work.

But there are also certain conditions which are given below-

  • Place of business

ITC (Input Tax Product) will be allowed in both cases

  • Effective date

To receive back the goods, is there any time limit for the manufacturer

Yes, the principal manufacturer must receive the goods back within the period given below:

  • Capital Goods – three years from the effective date
  • Input Goods – one year from the effective date

 

Summary of Conditions to Get the ITC on Goods Sent for Job Work

A. The goods can be sent to the job worker:

  • From the place of business of the principal
  • Directly from the supplier’s place of supply of such goods
  • ITC will be allowed in both cases.

B. The effective date for goods sent depends on the place of business:

  • Sent from the place of business of the principal- Date of goods sent out
  • Sent directly from the supplier’s place of supply of such goods- Date of receipt by job worker

C. Time duration in which the goods sent to the principal manufacturer must be received is:

  • Capital Goods for 3 years
  • Input Goods for 1 year

D. If in any case, the goods are not received within the time period which is mentioned above will be considered as the supply from the effective date and tax will be charged.

 

Form GST ITC 04

The principal manufacturer must submit the FORM GST ITC-04 every quarter. Given below are the details that the principal manufacturer must include in the challans-

  • The goods which are dispatched to a job worker or
  • The goods received from a job worker or
  • The goods sent from one job worker to another.

 

GST ITC 04 Offline Utility

ITC 04 offline tool is a utility to discover all the details when the manufacturer has sent any goods(capital or input type) to a Job Worker and relevant dealings. Download the offline utility will help the manufacturer in preparing ITC 04 even when there is no internet. Also, it would assist in the bulk upload of the invoice to the GST portal.

 

How to Create ITC 04 Challan Offline?

There are 2 parts in which it can be provided-

The goods sent to a job worker and

The goods received from the job worker

1. Details of capital/inputs goods sent to job-work

The details like challan number, GSTIN, tax amount, etc. must be mentioned and all these details are available in challans.

2. Goods received from the job worker or goods sent out from the business place of job-work

The details of the goods that are received back from the job worker will be mentioned here. 

All the details of the original and new challans must be mentioned

 

 

Guide for Filing ITC-04 Form on GST portal:

Given below is the step-by-step guide for filing the ITC-04 form on the GST portal.

Step 1: Log in to the GST Portal

Step 2: Go to the Services -> Returns -> ITC Forms

Step 3: Go to “Prepare Offline” -> Upload invoices | After the upload of invoices click ‘Initiate Filing’.

Step 4: Select the tax period, Check the taxable amount and other details

Step 5: At last, file the return with DSC or EVC as applicable

 

CONCLUSION:

The government has given ample time to the job workers to return the goods back to the principal manufacturer. With the help of GST, there will be transparency in the details of ITC on goods sent for job work.

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