Special issues concerning Goods sent for Job work:
Goods sent to a job worker for the purpose of job work is a supply liable to tax under GST. However, as per Section 143 of the CGST Act, the principal may choose to send goods for job work without payment of tax subject to fulfillment of certain conditions. The documents that needs to be issued for movement of goods between the principal and the job worker are as follows:
1. Good sent for job work on payment of tax – The principal shall issue a tax invoice for goods sent for job work. The job worker, if registered, shall return the goods by raising another tax invoice. In case of receipt of goods after job work from an unregistered job worker, the principal will be required to raise an invoice as per Section 9(4) of the CGST Act (which is exempted till 30th June, 2018).
2. Goods sent for job work without payment of tax – Circular No.38/12/2018 dated 26th March, 2018 has clarified the following:
(a) Where goods are sent by principal to only one job worker: The principal shall prepare in triplicate, the challan in terms of Rule 45 read with Rule 55 of the CGST Rules, for sending the goods to a job worker. Two copies of the challan may be sent to the job worker along with the goods. The job worker should send one copy of the said challan along with the goods, while returning them to the principal.
(b) Where goods are sent from one job worker to another job worker: In such cases, the goods may move under the cover of a challan issued either by the principal or the job worker. Alternatively, the challan issued by the principal may be endorsed by the job worker sending the goods to another job worker, indicating therein the quantity and description of goods being sent. The same process may be repeated for subsequent movement of the goods to other job workers.
(c) Where the goods are sent directly by the supplier to the job worker: In this case, the goods may move from the place of business of the supplier to the place of business/premises of the job worker with a copy of the invoice issued by the supplier in the name of the buyer (i.e. the principal) wherein the job worker’s name and address should also be mentioned as the consignee, in terms of Rule 46(o) of the CGST Rules. The principal shall issue the challan under Rule 45 of the CGST Rules and send the same to the job worker directly in terms of para (a) above. In case of import of goods by the principal which are then supplied directly from the customs station of import, the goods may move from the customs station of import to the place of business/premises of the job worker with a copy of the Bill of Entry and the principal shall issue the challan under rule 45 of the CGST Rules and send the same to the job worker directly.
(d) Where goods are returned in piecemeal by the job worker: In case the goods after carrying out the job work, are sent in piecemeal quantities by a job worker to another job worker or to the principal, the challan issued originally by the principal cannot be endorsed and a fresh challan is required to be issued by the job worker.