Sec 2(62) – Job work means undertaking “any treatment or process” by a person on goods belonging to a “registered taxable person” and the word Job Worker shall be construed accordingly.
Sec 43A (2) – The principal shall be accountable for the goods sent for Job work and also responsible for discharge of Tax liability on the goods.
Sec 43A (1) – The commissioner can by a special order and under conditions specified by him allow the principal to send goods for Job work and from there to another job worker without payment of GST .
Sec 43A(1) – Principal / Job worker need not pay GST on receiving/ returning the goods after Job work if send for job work with the approval of commissioner as above.
Sec 43A (1) – The principal on payment of Tax or in the case of export with or without payment of tax , can supply the goods from his premises. The principal may also supply the goods directly from premises of Job worker on payment of Tax or in case of export with or wihout payment of tax, provided the job worker is registered u/s 19 or the principal adds the premises of job worker as additional place of business or the principal is dealing in goods notified as permitted as such in this behalf.
Sec 16A – The principal can take input credit of goods sent for job work provided the goods are received back after job work within 180 days from the date removal from premises of principal. In case of capital goods, the input can be availed provided the capital goods are received back with 2 years from the date of removal from the premises of the principal.
Where the goods are delivered directly to the job worker the above time period will be construed from date of receipt by job worker.
Where the goods are not received back within the time period as above, the principal is liable to pay the amount of such Input Tax Credit availed and pay interest for the period of delay as specified u/s 36(1).
Such input credit and interest paid can be reclaimed once the goods are received by the principal.
The principal / job worker should disclose in prescribed format the goods sent / lying with them for job work and such goods shall be returned after job work within six months from date of implementation of GST. Otherwise the principal / job worker shall be liable to pay tax on such goods.
A person required to be registered as per schedule III of GST law if aggregate turnover exceeds 9 Lakhs. But explanation 2 to clause 1 of schedule states that value goods returned to principal after job work by a job worker will not be included in aggregate turnover of job worker. So a person doing only job work for a principal is not required to be registered since his aggregate turnover is not exceeding the limits specified.
If you would like to know more or have any questions, please fill up your details and we will get back to at the earliest.