Ch 26 -Job work | GST Saral by CA Dhruv Aggarwal PDF Download

 Page 1


about:blank 1/5 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 26 - Job work 
 
 
 
 
 
CHAPTER 26 
 
Job work 
 
EXECUTIVE SUMMARY 
 
?   Goods on which Input Tax Credit (ITC) is taken can be sent at another place for job work as per 
provisions of section 143 of CGST. 
?   "Job work" means  undertaking  any treatment  or process  by a person on goods  belonging to 
another registered person and the expression "job worker" shall be construed accordingly - section 
2(68) of CGST Act. 
?   Intimation is required to be given for sending goods for job work [seems intimation of details in 
monthly return is sufficient]. 
?   Goods can be sent directly to place of job worker and can be supplied to recipient directly from 
place of job worker. 
?   Inputs  and  semi-finished  goods  can be  sent  for  job  work.  These  should  be  brought  back  or 
despatched directly from place of job worker within one year. 
?   Capital goods can be sent to place of job worker for period upto three years, This time limit is not 
applicable for sending moulds, dies, jigs, fixtures and tools to the place of job worker. 
?   Any waste and scrap generated during the job work may be supplied by the job worker directly 
from his place of business on payment of tax if such job worker is registered, or by the principal, if 
the job worker is not registered - section 143(5) of CGST Act. 
?   When material is sent for job work, Delivery Challan should be prepared in triplicate containing 
details specified in rule No. 8(1) of Invoice Rules. 
?   Details of challans in respect of goods dispatched to a job worker or received from job worker shall 
be included in return in Form GSTR-1. 
?   If inputs/capital goods are not received during prescribed period, GST will be payable for which 
challan issued will be considered as 'invoice'. 
?   If inputs or semi-finished goods sent by Principal are lying with job worker on 1-7-2017, Principal 
should submit stock statement as on 1-7-2017 and then he can take input tax credit of central excise 
duty or State Vat paid on those goods - section 141 of CGST Act. 
26.1 Special provisions for job work 
 
GST Law makes elaborate provisions relating to job work. 
 
The provisions have been made as material sent for job work is 'supply'. Hence, GST would have been 
payable on material sent for job work. This was not practical. 
"Job work" means undertaking any treatment or process by a person on goods belonging to another registered 
person and the expression "job worker" shall be construed accordingly - section 2(68) of CGST Act. 
Page 2


about:blank 1/5 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 26 - Job work 
 
 
 
 
 
CHAPTER 26 
 
Job work 
 
EXECUTIVE SUMMARY 
 
?   Goods on which Input Tax Credit (ITC) is taken can be sent at another place for job work as per 
provisions of section 143 of CGST. 
?   "Job work" means  undertaking  any treatment  or process  by a person on goods  belonging to 
another registered person and the expression "job worker" shall be construed accordingly - section 
2(68) of CGST Act. 
?   Intimation is required to be given for sending goods for job work [seems intimation of details in 
monthly return is sufficient]. 
?   Goods can be sent directly to place of job worker and can be supplied to recipient directly from 
place of job worker. 
?   Inputs  and  semi-finished  goods  can be  sent  for  job  work.  These  should  be  brought  back  or 
despatched directly from place of job worker within one year. 
?   Capital goods can be sent to place of job worker for period upto three years, This time limit is not 
applicable for sending moulds, dies, jigs, fixtures and tools to the place of job worker. 
?   Any waste and scrap generated during the job work may be supplied by the job worker directly 
from his place of business on payment of tax if such job worker is registered, or by the principal, if 
the job worker is not registered - section 143(5) of CGST Act. 
?   When material is sent for job work, Delivery Challan should be prepared in triplicate containing 
details specified in rule No. 8(1) of Invoice Rules. 
?   Details of challans in respect of goods dispatched to a job worker or received from job worker shall 
be included in return in Form GSTR-1. 
?   If inputs/capital goods are not received during prescribed period, GST will be payable for which 
challan issued will be considered as 'invoice'. 
?   If inputs or semi-finished goods sent by Principal are lying with job worker on 1-7-2017, Principal 
should submit stock statement as on 1-7-2017 and then he can take input tax credit of central excise 
duty or State Vat paid on those goods - section 141 of CGST Act. 
26.1 Special provisions for job work 
 
GST Law makes elaborate provisions relating to job work. 
 
The provisions have been made as material sent for job work is 'supply'. Hence, GST would have been 
payable on material sent for job work. This was not practical. 
"Job work" means undertaking any treatment or process by a person on goods belonging to another registered 
person and the expression "job worker" shall be construed accordingly - section 2(68) of CGST Act. 
about:blank 2/5 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
Section 19 of CGST Act make provisions relating to taking input tax credit in respect of inputs sent for job 
work. 
Section 143 of CGST Act makes provisions for special procedure for removal of goods for job work without 
payment of tax. 
Transitory  provisions  - Sections 141 of CGST Act make provisions in respect of inputs, semi-finished 
goods and finished goods which were removed for job work before 1-7-2017 (i.e. introduction of GST) and 
returned after 1-7-2017. 
26.1-1 Principal with reference to job work 
 
Person sending goods for job work is termed as 'Principal'. He should be a registered person. 
 
The term 'principal' used with reference to job work is di fferent from the term 'principal' as defined in section 
2(88) of IGST Act. 
 
'Principal' for purpose of job work provisions means a registered person who sends any inputs and/or capital 
goods, without payment of tax, to a job worker for job-work and from there subsequently send to another job 
worker and likewise - section 143(1) of CGST Act and explanation to section 19(7) of CGST Act. 
26.1-2 In case of job work, value  of material will be included in aggregate turnover of principal for 
considering exemption available to small persons 
The supply of goods, after completion of job-work, by a registered job worker shall be treated as the supply 
of goods by the principal referred to in section 143, and the value of such goods shall not be included in the 
aggregate turnover of the registered job worker - Explanation (i) to section 22 of CGST Act. 
Thus, in case of job work, value of material will be included in aggregate turnover of principal for considering 
exemption available to sma l persons (having turnover of 20/10 lakhs) and not in turnover of job worker. 
26.2 Special procedure for removal of inputs  or capital  goods for job work 
 
A registered person (hereinafter referred to in this section as the "principal") may, under intimation and subject 
to such conditions as may be prescribed, send any inputs and/or capital goods, without payment of tax, to a 
job worker for job-work and from there subsequently send to another job worker and likewise - section 
143(1) of CGST Act. 
 
Intermediate product can be sent for job work - For the purpose of job work, input includes intermediate 
goods arising from any treatment or process carried out on the inputs by the principal or the job worker - 
explanation to section 143 of CGST Act. 
The inputs/capital goods can be sent to job worker from place of business of principal. These can also be sent 
directly from the place of supplier of those inputs and capital goods, without bri nging them at the place of 
business of principal - section 19 of CGST Act. 
Why intimation  every time? = Job work is very common in industry. It is impractical to give intimation to 
department in every case. This is against concept of 'ease of doing business'. Let us hope that this impractical 
provision is dropped. In any case, 'intimation' by email should be sufficient. 
26.2-1 Which goods can be sent for job work 
 
Inputs and capital goods can be sent for job work. 
 
'Moulds and dies, jigs and fixtures, or tools' can also be sent for which separate provisions have been made. 
 
26.2-2 Bringing back goods after job work 
 
The 'principal' should bring back inputs, after completion of job-work or otherwise, and/or capital goods, 
Page 3


about:blank 1/5 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 26 - Job work 
 
 
 
 
 
CHAPTER 26 
 
Job work 
 
EXECUTIVE SUMMARY 
 
?   Goods on which Input Tax Credit (ITC) is taken can be sent at another place for job work as per 
provisions of section 143 of CGST. 
?   "Job work" means  undertaking  any treatment  or process  by a person on goods  belonging to 
another registered person and the expression "job worker" shall be construed accordingly - section 
2(68) of CGST Act. 
?   Intimation is required to be given for sending goods for job work [seems intimation of details in 
monthly return is sufficient]. 
?   Goods can be sent directly to place of job worker and can be supplied to recipient directly from 
place of job worker. 
?   Inputs  and  semi-finished  goods  can be  sent  for  job  work.  These  should  be  brought  back  or 
despatched directly from place of job worker within one year. 
?   Capital goods can be sent to place of job worker for period upto three years, This time limit is not 
applicable for sending moulds, dies, jigs, fixtures and tools to the place of job worker. 
?   Any waste and scrap generated during the job work may be supplied by the job worker directly 
from his place of business on payment of tax if such job worker is registered, or by the principal, if 
the job worker is not registered - section 143(5) of CGST Act. 
?   When material is sent for job work, Delivery Challan should be prepared in triplicate containing 
details specified in rule No. 8(1) of Invoice Rules. 
?   Details of challans in respect of goods dispatched to a job worker or received from job worker shall 
be included in return in Form GSTR-1. 
?   If inputs/capital goods are not received during prescribed period, GST will be payable for which 
challan issued will be considered as 'invoice'. 
?   If inputs or semi-finished goods sent by Principal are lying with job worker on 1-7-2017, Principal 
should submit stock statement as on 1-7-2017 and then he can take input tax credit of central excise 
duty or State Vat paid on those goods - section 141 of CGST Act. 
26.1 Special provisions for job work 
 
GST Law makes elaborate provisions relating to job work. 
 
The provisions have been made as material sent for job work is 'supply'. Hence, GST would have been 
payable on material sent for job work. This was not practical. 
"Job work" means undertaking any treatment or process by a person on goods belonging to another registered 
person and the expression "job worker" shall be construed accordingly - section 2(68) of CGST Act. 
about:blank 2/5 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
Section 19 of CGST Act make provisions relating to taking input tax credit in respect of inputs sent for job 
work. 
Section 143 of CGST Act makes provisions for special procedure for removal of goods for job work without 
payment of tax. 
Transitory  provisions  - Sections 141 of CGST Act make provisions in respect of inputs, semi-finished 
goods and finished goods which were removed for job work before 1-7-2017 (i.e. introduction of GST) and 
returned after 1-7-2017. 
26.1-1 Principal with reference to job work 
 
Person sending goods for job work is termed as 'Principal'. He should be a registered person. 
 
The term 'principal' used with reference to job work is di fferent from the term 'principal' as defined in section 
2(88) of IGST Act. 
 
'Principal' for purpose of job work provisions means a registered person who sends any inputs and/or capital 
goods, without payment of tax, to a job worker for job-work and from there subsequently send to another job 
worker and likewise - section 143(1) of CGST Act and explanation to section 19(7) of CGST Act. 
26.1-2 In case of job work, value  of material will be included in aggregate turnover of principal for 
considering exemption available to small persons 
The supply of goods, after completion of job-work, by a registered job worker shall be treated as the supply 
of goods by the principal referred to in section 143, and the value of such goods shall not be included in the 
aggregate turnover of the registered job worker - Explanation (i) to section 22 of CGST Act. 
Thus, in case of job work, value of material will be included in aggregate turnover of principal for considering 
exemption available to sma l persons (having turnover of 20/10 lakhs) and not in turnover of job worker. 
26.2 Special procedure for removal of inputs  or capital  goods for job work 
 
A registered person (hereinafter referred to in this section as the "principal") may, under intimation and subject 
to such conditions as may be prescribed, send any inputs and/or capital goods, without payment of tax, to a 
job worker for job-work and from there subsequently send to another job worker and likewise - section 
143(1) of CGST Act. 
 
Intermediate product can be sent for job work - For the purpose of job work, input includes intermediate 
goods arising from any treatment or process carried out on the inputs by the principal or the job worker - 
explanation to section 143 of CGST Act. 
The inputs/capital goods can be sent to job worker from place of business of principal. These can also be sent 
directly from the place of supplier of those inputs and capital goods, without bri nging them at the place of 
business of principal - section 19 of CGST Act. 
Why intimation  every time? = Job work is very common in industry. It is impractical to give intimation to 
department in every case. This is against concept of 'ease of doing business'. Let us hope that this impractical 
provision is dropped. In any case, 'intimation' by email should be sufficient. 
26.2-1 Which goods can be sent for job work 
 
Inputs and capital goods can be sent for job work. 
 
'Moulds and dies, jigs and fixtures, or tools' can also be sent for which separate provisions have been made. 
 
26.2-2 Bringing back goods after job work 
 
The 'principal' should bring back inputs, after completion of job-work or otherwise, and/or capital goods, 
about:blank 3/5 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
other than moulds and dies, jigs and fixtures, or tools, within one year and three years, respectively, of their 
being sent out, to any of his place of business, without payment of tax - section 143(1)(a) of CGST Act. 
There is no time limit for bri nging back moulds and dies, jigs and fixtures, or tools. 
 
The term 'bring back' in this sub-section is not correct as the goods after job work can be brought to any of 
the place of business of 'principal'. 
26.2-3 Direct dispatch from place of job worker if job worker not registered 
 
After job work, the finished goods (inputs after job work or capital goods) can be sent directly from place of 
job worker, instead of bri nging them back to place of business of 'principal'. If such supply is in India, GST is 
payable. Such goods can also be exported directly from place of job worker, either on payment of GST or 
without payment of GST - section 143(1)(b) CGST Act. 
The goods shall not be permitted to be supplied from the place of business of a job worker in terms of clause 
(b) unless the "principal" declares the place of business of the job-worker as his additional place of business 
except in a case- (i) where the job worker is registered under section 25 of CGST Act; or ( i) where the 
"principal" is engaged in the supply of such goods as may be notified by the Commissioner in this behalf - 
proviso to section 143(1) of CGST Act. 
If job worker is registered under GST, then the 'principal' is not required to declare the place of job worker as 
additional place of business. 
26.2-4 Responsibility of tax and goods is of Principal 
 
The responsibility for accountability of the goods including payment of tax thereon shall lie with the "principal" - 
section 143(2) of CGST Act. 
26.2-5 If inputs  or capital  goods are not returned within one/three years 
 
If inputs or capital goods are not received back by 'principal' within one/three years. GST shall be payable as 
if the inputs/capital goods were supplied by the principal to job worker on the day when the inputs/capital 
goods were sent out - section 143(3) and 143(4) of CGST Act. 
If inputs or capital goods are directly sent to place of job worker, the period of one/three years will be 
counted from date of receipt of inputs/capital goods by the job worker - proviso to section 19(3) and proviso 
to 19(6) of CGST Act. 
The meaning of 'on the day when the inputs/capital goods were sent out' can mean that (a) GST rate as 
applicable on the day when they are sent out will be relevant (b) Interest for one/three years will be payable. 
26.2-6 Special provisions relating to moulds  and dies, jigs and fixtures, or tools 
 
The provision of returning goods within one/three years is not applicable to moulds and dies, jigs and fixtures, 
or tools. These may be retained at place of job worker.- section 19(7) of CGST Act. 
Thus, the job worker can sale them as scrap on payment of GST if he is registered. If he is not registered, 
GST can be paid by 'principal' on such scrap. 
26.2-7 Clearance of waste and scrap arising during job work 
 
Any waste and scrap generated during the job work may be supplied by the job worker directly from his 
place of business on payment of tax if such job worker is registered, or by the principal, if the job worker is 
not registered - section 143(5) of CGST Act. 
26.3 Input Tax Credit of inputs  and capital  goods sent for job work 
 
The "principal" sha l, subject to such conditions and restrictions as may be prescribed, be entitled to take credit 
Page 4


about:blank 1/5 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 26 - Job work 
 
 
 
 
 
CHAPTER 26 
 
Job work 
 
EXECUTIVE SUMMARY 
 
?   Goods on which Input Tax Credit (ITC) is taken can be sent at another place for job work as per 
provisions of section 143 of CGST. 
?   "Job work" means  undertaking  any treatment  or process  by a person on goods  belonging to 
another registered person and the expression "job worker" shall be construed accordingly - section 
2(68) of CGST Act. 
?   Intimation is required to be given for sending goods for job work [seems intimation of details in 
monthly return is sufficient]. 
?   Goods can be sent directly to place of job worker and can be supplied to recipient directly from 
place of job worker. 
?   Inputs  and  semi-finished  goods  can be  sent  for  job  work.  These  should  be  brought  back  or 
despatched directly from place of job worker within one year. 
?   Capital goods can be sent to place of job worker for period upto three years, This time limit is not 
applicable for sending moulds, dies, jigs, fixtures and tools to the place of job worker. 
?   Any waste and scrap generated during the job work may be supplied by the job worker directly 
from his place of business on payment of tax if such job worker is registered, or by the principal, if 
the job worker is not registered - section 143(5) of CGST Act. 
?   When material is sent for job work, Delivery Challan should be prepared in triplicate containing 
details specified in rule No. 8(1) of Invoice Rules. 
?   Details of challans in respect of goods dispatched to a job worker or received from job worker shall 
be included in return in Form GSTR-1. 
?   If inputs/capital goods are not received during prescribed period, GST will be payable for which 
challan issued will be considered as 'invoice'. 
?   If inputs or semi-finished goods sent by Principal are lying with job worker on 1-7-2017, Principal 
should submit stock statement as on 1-7-2017 and then he can take input tax credit of central excise 
duty or State Vat paid on those goods - section 141 of CGST Act. 
26.1 Special provisions for job work 
 
GST Law makes elaborate provisions relating to job work. 
 
The provisions have been made as material sent for job work is 'supply'. Hence, GST would have been 
payable on material sent for job work. This was not practical. 
"Job work" means undertaking any treatment or process by a person on goods belonging to another registered 
person and the expression "job worker" shall be construed accordingly - section 2(68) of CGST Act. 
about:blank 2/5 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
Section 19 of CGST Act make provisions relating to taking input tax credit in respect of inputs sent for job 
work. 
Section 143 of CGST Act makes provisions for special procedure for removal of goods for job work without 
payment of tax. 
Transitory  provisions  - Sections 141 of CGST Act make provisions in respect of inputs, semi-finished 
goods and finished goods which were removed for job work before 1-7-2017 (i.e. introduction of GST) and 
returned after 1-7-2017. 
26.1-1 Principal with reference to job work 
 
Person sending goods for job work is termed as 'Principal'. He should be a registered person. 
 
The term 'principal' used with reference to job work is di fferent from the term 'principal' as defined in section 
2(88) of IGST Act. 
 
'Principal' for purpose of job work provisions means a registered person who sends any inputs and/or capital 
goods, without payment of tax, to a job worker for job-work and from there subsequently send to another job 
worker and likewise - section 143(1) of CGST Act and explanation to section 19(7) of CGST Act. 
26.1-2 In case of job work, value  of material will be included in aggregate turnover of principal for 
considering exemption available to small persons 
The supply of goods, after completion of job-work, by a registered job worker shall be treated as the supply 
of goods by the principal referred to in section 143, and the value of such goods shall not be included in the 
aggregate turnover of the registered job worker - Explanation (i) to section 22 of CGST Act. 
Thus, in case of job work, value of material will be included in aggregate turnover of principal for considering 
exemption available to sma l persons (having turnover of 20/10 lakhs) and not in turnover of job worker. 
26.2 Special procedure for removal of inputs  or capital  goods for job work 
 
A registered person (hereinafter referred to in this section as the "principal") may, under intimation and subject 
to such conditions as may be prescribed, send any inputs and/or capital goods, without payment of tax, to a 
job worker for job-work and from there subsequently send to another job worker and likewise - section 
143(1) of CGST Act. 
 
Intermediate product can be sent for job work - For the purpose of job work, input includes intermediate 
goods arising from any treatment or process carried out on the inputs by the principal or the job worker - 
explanation to section 143 of CGST Act. 
The inputs/capital goods can be sent to job worker from place of business of principal. These can also be sent 
directly from the place of supplier of those inputs and capital goods, without bri nging them at the place of 
business of principal - section 19 of CGST Act. 
Why intimation  every time? = Job work is very common in industry. It is impractical to give intimation to 
department in every case. This is against concept of 'ease of doing business'. Let us hope that this impractical 
provision is dropped. In any case, 'intimation' by email should be sufficient. 
26.2-1 Which goods can be sent for job work 
 
Inputs and capital goods can be sent for job work. 
 
'Moulds and dies, jigs and fixtures, or tools' can also be sent for which separate provisions have been made. 
 
26.2-2 Bringing back goods after job work 
 
The 'principal' should bring back inputs, after completion of job-work or otherwise, and/or capital goods, 
about:blank 3/5 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
other than moulds and dies, jigs and fixtures, or tools, within one year and three years, respectively, of their 
being sent out, to any of his place of business, without payment of tax - section 143(1)(a) of CGST Act. 
There is no time limit for bri nging back moulds and dies, jigs and fixtures, or tools. 
 
The term 'bring back' in this sub-section is not correct as the goods after job work can be brought to any of 
the place of business of 'principal'. 
26.2-3 Direct dispatch from place of job worker if job worker not registered 
 
After job work, the finished goods (inputs after job work or capital goods) can be sent directly from place of 
job worker, instead of bri nging them back to place of business of 'principal'. If such supply is in India, GST is 
payable. Such goods can also be exported directly from place of job worker, either on payment of GST or 
without payment of GST - section 143(1)(b) CGST Act. 
The goods shall not be permitted to be supplied from the place of business of a job worker in terms of clause 
(b) unless the "principal" declares the place of business of the job-worker as his additional place of business 
except in a case- (i) where the job worker is registered under section 25 of CGST Act; or ( i) where the 
"principal" is engaged in the supply of such goods as may be notified by the Commissioner in this behalf - 
proviso to section 143(1) of CGST Act. 
If job worker is registered under GST, then the 'principal' is not required to declare the place of job worker as 
additional place of business. 
26.2-4 Responsibility of tax and goods is of Principal 
 
The responsibility for accountability of the goods including payment of tax thereon shall lie with the "principal" - 
section 143(2) of CGST Act. 
26.2-5 If inputs  or capital  goods are not returned within one/three years 
 
If inputs or capital goods are not received back by 'principal' within one/three years. GST shall be payable as 
if the inputs/capital goods were supplied by the principal to job worker on the day when the inputs/capital 
goods were sent out - section 143(3) and 143(4) of CGST Act. 
If inputs or capital goods are directly sent to place of job worker, the period of one/three years will be 
counted from date of receipt of inputs/capital goods by the job worker - proviso to section 19(3) and proviso 
to 19(6) of CGST Act. 
The meaning of 'on the day when the inputs/capital goods were sent out' can mean that (a) GST rate as 
applicable on the day when they are sent out will be relevant (b) Interest for one/three years will be payable. 
26.2-6 Special provisions relating to moulds  and dies, jigs and fixtures, or tools 
 
The provision of returning goods within one/three years is not applicable to moulds and dies, jigs and fixtures, 
or tools. These may be retained at place of job worker.- section 19(7) of CGST Act. 
Thus, the job worker can sale them as scrap on payment of GST if he is registered. If he is not registered, 
GST can be paid by 'principal' on such scrap. 
26.2-7 Clearance of waste and scrap arising during job work 
 
Any waste and scrap generated during the job work may be supplied by the job worker directly from his 
place of business on payment of tax if such job worker is registered, or by the principal, if the job worker is 
not registered - section 143(5) of CGST Act. 
26.3 Input Tax Credit of inputs  and capital  goods sent for job work 
 
The "principal" sha l, subject to such conditions and restrictions as may be prescribed, be entitled to take credit 
about:blank 4/5 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
of input tax on inputs and capital goods sent to a job-worker for job-work - section 19(1) and 19(4) of 
CGST Act. 
 
The "principal" shall be entitled to take credit of input tax on inputs even if the inputs or capital goods are 
directly sent to a job worker for job-work without their being first brought to his place of business - section 
19(2) and 19(5) of CGST Act. 
 
ITC of capital  goods sent to job worker - The "principal" sha l, subject to such conditions and restrictions 
as may be prescribed, be entitled to take credit of input tax on capital goods sent to a job-worker for job- 
work if the said capital goods, after completion of job-work, are received back by him within three years of 
their being sent out - section 19(4) of CGST Act. 
The "principal" shall be entitled to take credit of input tax on capital goods even if the capital goods are directly 
sent to a job worker for job-work without their being first brought to his place of business, and in such a case, 
the period of three years shall be counted from the date of receipt of the capital goods by the job worker - 
section 19(5) of CGST Act. 
26.4 Delivery challan for sending  goods for job work 
 
For transportation of goods for job work, a delivery challan may be issued by consi gner instead of tax invoice 
- rule 8(1) of Invoice Rules. 
 
The delivery challan, seria ly numbered should be issued at the time of removal of goods for transportation, 
containing fo lowing details (i) date and number of the delivery challan ( i) name, address and GSTIN of the 
consigner, if registered ( i) name, address and GSTIN or UIN of the consi gnee, if registered (iv) HSN code 
and description of goods (v) quantity (provisional, where the exact quantity being supplied is not known) (vi) 
taxable value (v i) tax rate and tax amount - central tax, State tax, integrated tax, Union territory tax or cess, 
where the transportation is for supply to the consignee (v i) place of supply, in case of inter-State movement, 
and (ix) signature. 
Delivery challan  to be in triplicate - The delivery challan shall be prepared in triplicate, in case of supply 
of goods, with fo lowing marking - (a) the original copy being marked as ORIGINAL FOR CONSIGNEE (b) 
the duplicate copy being marked as DUPLICATE FOR TRANSPORTER; and(c) the triplicate copy being 
marked as TRIPLICATE FOR CONSIGNER - rule 7(3) of Invoice Rules. 
Where goods are being transported on a delivery challan in lieu of invoice, the same shall be declared in 
FORM [WAYBILL] - rule 7(3) of Invoice Rules [seems to be some mistake]. 
 
26.5 Procedure to be followed in respect of inputs  and capital  goods sent to the job worker 
 
The inputs or capital goods shall be sent to the job worker under the cover of a challan issued by the principal, 
including where the inputs or capital goods are sent directly to job-worker - rule 10(1) of Input Tax Credit 
Rules. 
The challan issued by the principal to the job worker shall contain the details specified in Invoice Rules - rule 
10(2) of Input Tax Credit Rules. 
 
The details of challans in respect of goods dispatched to a job worker or received from a job worker during a 
tax period shall be included in form GSTR-1 furnished for that period - rule 10(3) of Input Tax Credit Rules. 
If the inputs or capital goods are not returned to the principal within the time stipulated in section 143, the 
challan issued under rule 10(1) shall be deemed to be an invoice for the purposes of this Act - rule 10(4) of 
Input Tax Credit Rules. 
Explanation.—For the purposes of this Chapter,— 
Page 5


about:blank 1/5 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 26 - Job work 
 
 
 
 
 
CHAPTER 26 
 
Job work 
 
EXECUTIVE SUMMARY 
 
?   Goods on which Input Tax Credit (ITC) is taken can be sent at another place for job work as per 
provisions of section 143 of CGST. 
?   "Job work" means  undertaking  any treatment  or process  by a person on goods  belonging to 
another registered person and the expression "job worker" shall be construed accordingly - section 
2(68) of CGST Act. 
?   Intimation is required to be given for sending goods for job work [seems intimation of details in 
monthly return is sufficient]. 
?   Goods can be sent directly to place of job worker and can be supplied to recipient directly from 
place of job worker. 
?   Inputs  and  semi-finished  goods  can be  sent  for  job  work.  These  should  be  brought  back  or 
despatched directly from place of job worker within one year. 
?   Capital goods can be sent to place of job worker for period upto three years, This time limit is not 
applicable for sending moulds, dies, jigs, fixtures and tools to the place of job worker. 
?   Any waste and scrap generated during the job work may be supplied by the job worker directly 
from his place of business on payment of tax if such job worker is registered, or by the principal, if 
the job worker is not registered - section 143(5) of CGST Act. 
?   When material is sent for job work, Delivery Challan should be prepared in triplicate containing 
details specified in rule No. 8(1) of Invoice Rules. 
?   Details of challans in respect of goods dispatched to a job worker or received from job worker shall 
be included in return in Form GSTR-1. 
?   If inputs/capital goods are not received during prescribed period, GST will be payable for which 
challan issued will be considered as 'invoice'. 
?   If inputs or semi-finished goods sent by Principal are lying with job worker on 1-7-2017, Principal 
should submit stock statement as on 1-7-2017 and then he can take input tax credit of central excise 
duty or State Vat paid on those goods - section 141 of CGST Act. 
26.1 Special provisions for job work 
 
GST Law makes elaborate provisions relating to job work. 
 
The provisions have been made as material sent for job work is 'supply'. Hence, GST would have been 
payable on material sent for job work. This was not practical. 
"Job work" means undertaking any treatment or process by a person on goods belonging to another registered 
person and the expression "job worker" shall be construed accordingly - section 2(68) of CGST Act. 
about:blank 2/5 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
Section 19 of CGST Act make provisions relating to taking input tax credit in respect of inputs sent for job 
work. 
Section 143 of CGST Act makes provisions for special procedure for removal of goods for job work without 
payment of tax. 
Transitory  provisions  - Sections 141 of CGST Act make provisions in respect of inputs, semi-finished 
goods and finished goods which were removed for job work before 1-7-2017 (i.e. introduction of GST) and 
returned after 1-7-2017. 
26.1-1 Principal with reference to job work 
 
Person sending goods for job work is termed as 'Principal'. He should be a registered person. 
 
The term 'principal' used with reference to job work is di fferent from the term 'principal' as defined in section 
2(88) of IGST Act. 
 
'Principal' for purpose of job work provisions means a registered person who sends any inputs and/or capital 
goods, without payment of tax, to a job worker for job-work and from there subsequently send to another job 
worker and likewise - section 143(1) of CGST Act and explanation to section 19(7) of CGST Act. 
26.1-2 In case of job work, value  of material will be included in aggregate turnover of principal for 
considering exemption available to small persons 
The supply of goods, after completion of job-work, by a registered job worker shall be treated as the supply 
of goods by the principal referred to in section 143, and the value of such goods shall not be included in the 
aggregate turnover of the registered job worker - Explanation (i) to section 22 of CGST Act. 
Thus, in case of job work, value of material will be included in aggregate turnover of principal for considering 
exemption available to sma l persons (having turnover of 20/10 lakhs) and not in turnover of job worker. 
26.2 Special procedure for removal of inputs  or capital  goods for job work 
 
A registered person (hereinafter referred to in this section as the "principal") may, under intimation and subject 
to such conditions as may be prescribed, send any inputs and/or capital goods, without payment of tax, to a 
job worker for job-work and from there subsequently send to another job worker and likewise - section 
143(1) of CGST Act. 
 
Intermediate product can be sent for job work - For the purpose of job work, input includes intermediate 
goods arising from any treatment or process carried out on the inputs by the principal or the job worker - 
explanation to section 143 of CGST Act. 
The inputs/capital goods can be sent to job worker from place of business of principal. These can also be sent 
directly from the place of supplier of those inputs and capital goods, without bri nging them at the place of 
business of principal - section 19 of CGST Act. 
Why intimation  every time? = Job work is very common in industry. It is impractical to give intimation to 
department in every case. This is against concept of 'ease of doing business'. Let us hope that this impractical 
provision is dropped. In any case, 'intimation' by email should be sufficient. 
26.2-1 Which goods can be sent for job work 
 
Inputs and capital goods can be sent for job work. 
 
'Moulds and dies, jigs and fixtures, or tools' can also be sent for which separate provisions have been made. 
 
26.2-2 Bringing back goods after job work 
 
The 'principal' should bring back inputs, after completion of job-work or otherwise, and/or capital goods, 
about:blank 3/5 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
other than moulds and dies, jigs and fixtures, or tools, within one year and three years, respectively, of their 
being sent out, to any of his place of business, without payment of tax - section 143(1)(a) of CGST Act. 
There is no time limit for bri nging back moulds and dies, jigs and fixtures, or tools. 
 
The term 'bring back' in this sub-section is not correct as the goods after job work can be brought to any of 
the place of business of 'principal'. 
26.2-3 Direct dispatch from place of job worker if job worker not registered 
 
After job work, the finished goods (inputs after job work or capital goods) can be sent directly from place of 
job worker, instead of bri nging them back to place of business of 'principal'. If such supply is in India, GST is 
payable. Such goods can also be exported directly from place of job worker, either on payment of GST or 
without payment of GST - section 143(1)(b) CGST Act. 
The goods shall not be permitted to be supplied from the place of business of a job worker in terms of clause 
(b) unless the "principal" declares the place of business of the job-worker as his additional place of business 
except in a case- (i) where the job worker is registered under section 25 of CGST Act; or ( i) where the 
"principal" is engaged in the supply of such goods as may be notified by the Commissioner in this behalf - 
proviso to section 143(1) of CGST Act. 
If job worker is registered under GST, then the 'principal' is not required to declare the place of job worker as 
additional place of business. 
26.2-4 Responsibility of tax and goods is of Principal 
 
The responsibility for accountability of the goods including payment of tax thereon shall lie with the "principal" - 
section 143(2) of CGST Act. 
26.2-5 If inputs  or capital  goods are not returned within one/three years 
 
If inputs or capital goods are not received back by 'principal' within one/three years. GST shall be payable as 
if the inputs/capital goods were supplied by the principal to job worker on the day when the inputs/capital 
goods were sent out - section 143(3) and 143(4) of CGST Act. 
If inputs or capital goods are directly sent to place of job worker, the period of one/three years will be 
counted from date of receipt of inputs/capital goods by the job worker - proviso to section 19(3) and proviso 
to 19(6) of CGST Act. 
The meaning of 'on the day when the inputs/capital goods were sent out' can mean that (a) GST rate as 
applicable on the day when they are sent out will be relevant (b) Interest for one/three years will be payable. 
26.2-6 Special provisions relating to moulds  and dies, jigs and fixtures, or tools 
 
The provision of returning goods within one/three years is not applicable to moulds and dies, jigs and fixtures, 
or tools. These may be retained at place of job worker.- section 19(7) of CGST Act. 
Thus, the job worker can sale them as scrap on payment of GST if he is registered. If he is not registered, 
GST can be paid by 'principal' on such scrap. 
26.2-7 Clearance of waste and scrap arising during job work 
 
Any waste and scrap generated during the job work may be supplied by the job worker directly from his 
place of business on payment of tax if such job worker is registered, or by the principal, if the job worker is 
not registered - section 143(5) of CGST Act. 
26.3 Input Tax Credit of inputs  and capital  goods sent for job work 
 
The "principal" sha l, subject to such conditions and restrictions as may be prescribed, be entitled to take credit 
about:blank 4/5 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
of input tax on inputs and capital goods sent to a job-worker for job-work - section 19(1) and 19(4) of 
CGST Act. 
 
The "principal" shall be entitled to take credit of input tax on inputs even if the inputs or capital goods are 
directly sent to a job worker for job-work without their being first brought to his place of business - section 
19(2) and 19(5) of CGST Act. 
 
ITC of capital  goods sent to job worker - The "principal" sha l, subject to such conditions and restrictions 
as may be prescribed, be entitled to take credit of input tax on capital goods sent to a job-worker for job- 
work if the said capital goods, after completion of job-work, are received back by him within three years of 
their being sent out - section 19(4) of CGST Act. 
The "principal" shall be entitled to take credit of input tax on capital goods even if the capital goods are directly 
sent to a job worker for job-work without their being first brought to his place of business, and in such a case, 
the period of three years shall be counted from the date of receipt of the capital goods by the job worker - 
section 19(5) of CGST Act. 
26.4 Delivery challan for sending  goods for job work 
 
For transportation of goods for job work, a delivery challan may be issued by consi gner instead of tax invoice 
- rule 8(1) of Invoice Rules. 
 
The delivery challan, seria ly numbered should be issued at the time of removal of goods for transportation, 
containing fo lowing details (i) date and number of the delivery challan ( i) name, address and GSTIN of the 
consigner, if registered ( i) name, address and GSTIN or UIN of the consi gnee, if registered (iv) HSN code 
and description of goods (v) quantity (provisional, where the exact quantity being supplied is not known) (vi) 
taxable value (v i) tax rate and tax amount - central tax, State tax, integrated tax, Union territory tax or cess, 
where the transportation is for supply to the consignee (v i) place of supply, in case of inter-State movement, 
and (ix) signature. 
Delivery challan  to be in triplicate - The delivery challan shall be prepared in triplicate, in case of supply 
of goods, with fo lowing marking - (a) the original copy being marked as ORIGINAL FOR CONSIGNEE (b) 
the duplicate copy being marked as DUPLICATE FOR TRANSPORTER; and(c) the triplicate copy being 
marked as TRIPLICATE FOR CONSIGNER - rule 7(3) of Invoice Rules. 
Where goods are being transported on a delivery challan in lieu of invoice, the same shall be declared in 
FORM [WAYBILL] - rule 7(3) of Invoice Rules [seems to be some mistake]. 
 
26.5 Procedure to be followed in respect of inputs  and capital  goods sent to the job worker 
 
The inputs or capital goods shall be sent to the job worker under the cover of a challan issued by the principal, 
including where the inputs or capital goods are sent directly to job-worker - rule 10(1) of Input Tax Credit 
Rules. 
The challan issued by the principal to the job worker shall contain the details specified in Invoice Rules - rule 
10(2) of Input Tax Credit Rules. 
 
The details of challans in respect of goods dispatched to a job worker or received from a job worker during a 
tax period shall be included in form GSTR-1 furnished for that period - rule 10(3) of Input Tax Credit Rules. 
If the inputs or capital goods are not returned to the principal within the time stipulated in section 143, the 
challan issued under rule 10(1) shall be deemed to be an invoice for the purposes of this Act - rule 10(4) of 
Input Tax Credit Rules. 
Explanation.—For the purposes of this Chapter,— 
about:blank 5/5 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
(1)   "capital goods" shall include "plant and machinery" as defined in the Explanation to section 17. 
(2)   for determining the value of an exempt supply as referred to in sub-section (3) of section 17:-(a) the 
value of land and building shall be taken as the same as adopted for the purpose of paying stamp 
duty and (b) the value of security shall be taken as one per cent. of the sale value of such security. 
26.6 Transitory provisions in respect of goods sent to job worker prior to appointment day 
 
A taxable person might have sent Inputs, semi-finished goods and finished goods outside before 1-7-2017 for 
job work or testing. If these are received back before 31-12-2017, GST will not be payable - section 141 of 
CGST Act and section 141 of SGST Act.