GST Returns In Relation To Job Work

GST Returns In Relation To Job Work

Job work is a vertical of the business wherein a principal manufacturer can send inputs or semi-finished goods to a job worker for further processing. GST law is devised in a way to ensure the compliance liability for the job worker rests with the principal to the extent possible. ITC-04 is a return form required to be filled by the principal. Extensive data is required to be filed in this return which includes data in relation to wastages as well to keep the return airtight.

It is because of this reason that filling Return ITC 04 has seen multiple extensions.

In this article, we shall cover the following topics –

What Is Job Work Under GST?

OB WORK UNDER GST

In simple terms, Job work is nothing but a process undertaken by one person on raw material or semi-finished goods supplied by another person in order to convert the same into finished goods or semi-finished goods.

Here, the person undertaking job work is construed as Job Worker and the person on whose goods (Inputs/Capital Goods) job work is being done is termed as Principal. The ownership of the goods does not transfer to the job worker but it rests with the principal. The job worker is required to carry out the process specified by the principal, on the goods.

Considering that typically a job worker is an unorganized small enterprise who is unable to comply with the complex provisions of the law, the accountability to comply with GST norms has been shifted to the principal.

For a detailed explanation of job work, refer to our article on ‘job work charges’.

Procedure For Job Work

Section 143 of the CGST Act, 2017 provides the process of the job work. The steps are listed below-

  1. Principal, a registered person, can send inputs and capital goods under intimation without paying tax to the job worker and from there to another job worker and after completion of such job work, bring back such goods without payment of tax. In this case, the principal can avail the ITC on such input/ capital goods without reversing it.
  2. Such ITC can be availed even if the principal directly sends such inputs or capital goods to the premises of job worker without bringing them to his own premises
  3. 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.
  4. The job worker may clear the processed goods to, another job worker for further processing or dispatch the goods to any of the places of business of the principal without payment of tax and can also supply such goods on behalf of the principal within India or outside India with fulfillment of conditions.
  5. In case, where the goods are supplied by the principal to the third party directly from the premises of the job worker, the principal is required to declare the premise of the job worker as an additional place of business, provided that the premises of the job worker and the principal are in the same state. Otherwise the principal has to supply such goods from his place of business to the premises of a third party. In case the job worker is a registered person under GST, even declaring the premises of the job worker as an additional place of business is not required.

The inputs or capital goods shall be sent to the job worker under the cover of a challan issued by the principal. The challan is required to be issued for the inputs or capital goods sent directly to the job worker. The challan shall have all requisite details as given in the Invoice Rules. The responsibility for keeping proper accounts for the inputs or capital goods shall lie with the principal.

What Is ITC 04?

Form ITC-04 is a form which is required to be filled by a principal. The form contains details of inputs and capital goods sent to and received from the job worker; sent to and received by one job worker from another job worker. The form is required to be filed every quarter by the principal.

As discussed above, before the supply of goods to job workers, the principal would be required to intimate the Jurisdictional Officer of details of goods sent by the principal and the nature of processing to be carried out by the job worker. The said intimation shall also contain the details of the second job worker if any. Such intimation is required to be filed in Form ITC-04 on a quarterly basis.

In addition to the above, section 19 of the CGST Act, 2017, provides that ITC on inputs and capital goods can be claimed by the principal which are sent for job work provided that such goods are received back by the principal within the stipulated time period. Furthermore, the principal can also claim ITC if such inputs or capital goods are sent to the job worker for job work without being first brought to the place of business of the Principal.

Timeline To File ITC 04

ITC 04 needs to be filed by the principal or registered manufacturer sending inputs and capital goods for job work every quarter.

Such return is required to be filed on or before the 25th day of the month succeeding the said quarter or within such period as may be extended by the Commissioner by notification on this behalf.

Disclosures And Format Of ITC 04

Disclosures And Format Of ITC 04​

The form is described in detail below:

Basic Details –

  1. GSTIN – GSTIN of the Principal/Registered Manufacturer
  2. SEZ Unit/ Developer – In case the Principal is an SEZ Unit/Developer the same is to answer as Yes, otherwise No
  3. Return Year – Financial Year for which this ITC 04 pertains to, has to be mentioned here.
  4. Return Period – Quarter for which ITC 04 is furnished here.

Goods and Services

Table 4 – Details of inputs/capital goods sent for job work

This section has the following fields –

  1. GSTIN of Job worker, in case job worker is registered, otherwise, State of Job Worker, in case job worker is unregistered
  2. Details of challan created by the Principal at the time of sending inputs/capital goods for job work, such as challan number, challan date.
  3. Description of goods sent for Job work
  4. Unique Quantity Code of inputs/capital goods
  5. Quantity
  6. Table Value
  7. Type of goods, whether the goods are input or capital goods
  8. Tax details of such input/ capital goods.

Form GST ITC - 04

Table 5A: Details of inputs/capital goods received back from a job worker or sold directly from job workers place of business

  1. GSTIN of a job worker in a case registered, otherwise state of the job worker
  2. In case the challan issued by the principal at the time of sending the goods for job work is endorsed by the job worker, details of that challan to be mentioned. Otherwise, where a fresh challan is issued to the job worker, the same is to be disclosed along with number and date.
  3. Nature of the job work done by the job worker.
  4. The description of goods along with UQC and quantity is to be disclosed in this table.
  5. Losses and wastes details along with UQC and quantity of goods.

 capital goods received back from job worker

Section 5B – Details of inputs/capital goods received back from job worker other than the job worker to whom such goods were originally sent for job work; and losses and wastes

This table also contains similar disclosure as mentioned for Table 5A.goods were originally sent for job work; and losses and wastes

Table 5C: Details of Inputs/ Capital goods sent to a job worker and subsequently supplied from the premises of job worker; and losses and wastes

  1. GSTIN of a job worker in a case registered, otherwise state of the job worker
  2. In case the challan issued by the principal at the time of sending the goods for job work is endorsed by the job worker, details of that challan to be mentioned. Otherwise, where a fresh challan is issued to the job worker, the same is to be disclosed along with number and date.
  3. Nature of the job work done by the job worker.
  4. Description of goods along with UQC and quantity is to be disclosed in this table
  5. Losses and wastes details along with UQC and quantity of goods
  6. Invoice Number in the case supplied from the premises of the job worker issued by the Principal.
  7. Invoice Date in the case supplied from the premises of the job worker issued by the Principal.

GSTIN of job worker in case registered, otherwise state of the job worker

Notification /Circular No Date of Issue  Subject
138/08/2020-GST 06-05-2020 FORM GST ITC-04 for the quarter ending March 2020 stands extended up to 30.06.2020
38/2019 – Central Tax 31-08-2019 Filing of FORM ITC-04 for the period July 2017 to March 2019 shall be waived for such persons who were required to furnish the form, provided the said persons shall furnish such details as prescribed in the notification for the period July 2017 to March 2019 in serial number 4 of FORM ITC-04 for the quarter April-June, 2019.
32/2019 – Central Tax 28-06-2019 The due date to file ITC-04 on job work is extended till 31st August 2019 for the period July 2017 to June 2019.
15/2019 – Central Tax 28-03-2019 The declaration in ITC-04 in respect of goods dispatched to a job worker or received from a job worker, during the period from July 2017 to March 2019 is extended till the 30th of June 2019.
74/2018 – Central Tax 31-12-2018 Reporting in ITC-04 will now exclude any challans issued with regards to goods supplied between two job workers.
39/2018-Central Tax 04-09-2018 ITC 04 form was published in a new format
  • Where goods are returned in piecemeal by the job worker –

In case the goods on which job work is carried out, are sent in piecemeal by one job worker to another job worker or to the principal, the challan issued by the principal cannot be endorsed and a fresh challan is required to be issued by the job worker.  Relevant disclosures in Table 5B are required.

  • Submission of intimation –

Rule 45(3) of the CGST Rules, 2017, provides that a principal is required to furnish the details of challans in respect of goods sent to a job worker or received from a job worker or sent from one job worker to another job worker during the quarter in Form ITC 04 by the 25th of the month succeeding the quarter or within such period as may be extended by the Commissioner. Hence it is clarified that it is the responsibility of the principal to include details of all the challans relating to the goods sent by him to one job worker or from one job worker to another and its return therefrom.

Table 4 of the ITC 04 form serves as the intimation as mentioned in section 143 of CGST Act.

  • While uploading ITC-04 data on the portal, sometimes one challan number contains more than one description, but the portal does not accept this.

Ans. The information needs to be clubbed together in one line.

  • The offline utility does not allow to give reference to job work challans issued prior to 01 July 2017 as the requirement to file ITC-04 is only for goods sent to job work post-implementation of GST. However, there is a possibility that the goods sent for job work prior to 01 July 2017 are received back after July 2017 or are being sent to another job worker.
  • No mechanism to report cases where 5 different inputs are sent for job work which are used in manufacturing 1 single output.
  • Valuation of goods received from the job worker is an issue as there are no guidelines available

Ans to (ii) to (iv). These problems persisted in 2017-18 and 2018-19. The CBIC has waived the requirement to file ITC 04 for 2017-18 and 2018-19. Post this, a new format has been introduced to file ITC 04.

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