A job work means processing or working on raw material or semi-finished goods supplied by a principal manufacturer to a job worker. Suppose there is a registered person Mr. A who manufactures bags and he sends his semi-manufactured bags to Mr. B, a job worker, without paying any tax on such removal for installing chains on the bags. Here Mr. A is the principal and Mr. B is the job worker. According to section 143 of the CGST Act,
A registered person, hereinafter referred to as the principal, may send the inputs and capital goods, without paying tax on such removal, to a job worker for job work and from there such goods are transferred to another job wor-09ker and shall :
bring back inputs and capital goods other than moulds and dies, jigs and fixtures or tools within 1 years and 3 years respectively of their being sent out, after completion of the job work or other otherwise, to any of his place of business without payment of tax
supply such inputs, after completion of job work or otherwise, or capital goods other than moulds and dies, jigs and fixtures or tools, within 1 year or 3 years respectively, of their being sent out to job worker, from the place of business of the job worker on payment of tax within India, or with or without payment of tax to a place outside India for export.
The responsibility for keeping proper accounts for input and capital goods shall lie with the principal.
Where the inputs sent for job work are not received back by the principal in accordance with clause (a) and (b) of sub section (1) of section 143 of the CGST Act within a period of 1 year it shall be deemed that inputs have been supplied by the principal to the job worker on the day the inputs were sent out.
Where the capital goods sent for job work are not received back by the principal in accordance with clause (a) and (b) of sub section (1) of section 143 of the CGST Act within a period of 1 year it shall be deemed that inputs have been supplied by the principal to the job worker on the day the capital goods were sent out.
Notwithstanding anything contained in sub section (1) and (2) of section 143 of the CGST Act, if there are any waste or scrap generated during the process of job work then such scrap can be supplied directly by the job worker from his place of business on payment of tax if such job worker is registered and if the job worker is not registered it can be supplied by the principal.
The section 143 should be read with rule 45 which states some conditions and restrictions in respect of input and capital goods sent to a job worker, below are some conditions and restrictions are enlisted herein
Rule 45- Conditions and restrictions in respect of input and capital goods
The inputs, semi-finished goods and capital goods shall be sent to the job worker under the cover of challan issued by the principal including goods that are directly sent to the job worker and in cases where the goods are sent by one job worker to another job worker the challan shall be issued by the principal or the job worker sending the goods.
The challan issued by the principal to job worker shall contain the details mentioned in rule 55
The details of challan in respect of goods dispatched to or received by a job worker during a quarter shall be included in Form GST ITC-04 which is required to be furnished on or before 25th of the succeeding month of the said quarter
Where the inputs or capital goods are not returned to the principal within the stipulated time it shall be deemed that the principal has supplied such goods to the job worker and the details of such output supply is to be included in GSTR-1 and the principal is required to pay the tax and interest thereon.
The GST law has not yet been put in public domain, there is possibilities of few of these aspects could be applicable with certain modifications. Since the government has not come out with new rules to specify place of supply in situations other than the previous ones, it is important to interpret and come to a harmonious conclusion.
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