Job work under GST- Analysis

Last Updated On: Aug. 5, 2021, 12:03 a.m.



What is Job work?

Section 2(68), 2017 CGST Act defines job work as “any treatment or procedure that a person undertakes on goods belonging to a registered person”. A job worker is the one performing the job. The principal retains ownership of the goods. However, the rights to the goods do not pass to the job worker. The principal requires that the job worker performs the necessary work to obtain the goods.


Certain facilities with certain conditions are offered in relation to job work, some of which are as under:

a) A registered person (Principal) can send inputs/ capital goods under intimation and subject to certain conditions without payment of tax to a job worker and from there to another job worker and after completion of job work bring back such goods without payment of tax. The principal is not required to reverse the ITC availed on inputs or capital goods dispatched to job worker.

b) Principal can send inputs or capital goods directly to the job worker without bringing them to his premises, still the principal can avail the credit of tax paid on such inputs or capital goods.

c) However, inputs and/or capital goods sent to a job worker are required to be returned to the principal within 1 year and 3 years, respectively, from the date of sending such goods to the job worker.

d) After processing of goods, the job worker may clear the goods to-

(i) Another job worker for further processing;

(ii) Dispatch the goods to any of the place of business of the principal without payment of tax;

(iii) Remove the goods on payment of tax within India or without payment of tax for export outside India on fulfilment of conditions.

e) If the principal declares the premise of the worker as an additional business place in his registration, the principal may use the facility to supply goods directly by the principal to the third person. If the job worker is GST registered, it is not necessary to declare the premises of the worker as an additional place of business. The principal must inform the Jurisdictional officer before supplying goods to the job worker. This includes details about the inputs that the principal intends to send and the nature of the processing to be performed by the job worker. If possible, the information must also include details about another worker.

f) The principal must issue a challan to cover the inputs and capital goods that are sent to the job-seeker. Even for inputs or capital goods that are sent directly to the worker, the challan must be issued. The details of the Invoice Rules rule 10 shall be included in the challan.

g) Principal shall be responsible for maintaining proper accounting for inputs and capital goods.


Input Tax credit on goods supplied to job worker

Section 19 of 2017 CGST Act provides that the principal, a person who supplies taxable goods to a job worker, shall be entitled to claim the credit for input tax paid on the inputs sent by the worker to do the job. The proviso further states that the principal may claim credit even if the goods are directly delivered to the job- worker, without the goods being brought into the premises of the principal. The principal does not have to wait until the inputs arrive at his business.


Time Limits for return of processed goods

Section 19 of the CGST Act states that inputs and capital goods must be returned to the principal within one or three years of being sent. Further, the provision of return of goods is not applicable in case of moulds and dies, jigs and fixtures or tools supplied by the principal to job worker.


E-Way Bill requirements

1. E-Way Bill must be generated prior to goods being moved by the Job Worker to the principal or registered Job Worker.

2. The consignment of goods used for job work is not limited in value. If the consignment is less than Rs.1000, an e-way bill will be generated.

GST Return for goods supplied for Job Work

1. Section 143 requires that the principal inform Job Workers about all supplies made to them, as well as any supply made by another Job Worker. The principal is responsible for maintaining proper accounting for inputs and capital goods sent to Job Worker, as well as the items returned from Job Worker or supplied from the job site.

2. This information is required to be provided on GST Return Form ITC-04.

3. The principal must include details of all challans that relate to goods sent to or received from a job worker, or to one or more other job workers.

4. Rule 45(3) of CGST Rules states that the principal must provide details of challans relating to goods sent to a worker, received from a worker, or sent from one worker to another during a quarter in FORM GST ITC-04 by 25th of the following month or such extended period as the Commissioner may extend. The principal must include details of all challans that relate to goods sent to or received from a job worker, or to one or more other job workers.



Sl.No Job Work on GST Rate
1. Agriculture, forestry, fishing, animal husbandry



Intermediary services related to cultivation and animal rearing


3. (a) Printing of newspapers

(b) Textile and textile products

(c) Jewellery

(d) Printing of books (including Braille books), journals and periodicals

(e) Processing of hides, skins and leather




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