India Gold & Jewellery Summit 24 24 th th Nov ov 2018 2018 1
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JOB WORK UNDER GST What is Job work? As per clause (68) of section 2 of the CGST Act, 2017, “job work” means any treatment or process undertaken by a person on goods belonging to another registered person and the expression “job worker” shall be construed accordingly. . What if treatment or process is done on goods belonging to Unregistered person? Will there be a change in GST rate for job work done on goods belonging to unregistered person?? As per Para 6 of Circular No. 38/12/2018 dated 26th March, 2018 it is clarified that the provisions of section 143 of the CGST Act are applicable to a registered person. Thus, it is only a registered person who can send the goods for job work under the said provisions . Will Repairing / Testing / Hallmarking also be treated as Job work?? 3
NOTIFICATION NO. 11/2017-CENTRAL TAX (RATE) Sl.No Chapter, Section, Description of Service Rate Heading (per cent) 26 (i) Heading Services by way of job work in relation to — 9988 (a) printing of newspapers; (Manufacturi b) textiles and textile products falling under ng services Chapters 50 to 63 in the First Schedule to the on physical 2.5 . Customs Tariff Act, 1975 (51 of 1975) inputs (c) all products falling under Chapter 71 in the (goods) First Schedule to the Customs Tariff Act, 1975 owned by (51of 1975) others) (d) ………….. (ia) …………….. (iii) 2.5 Tailoring services. (iv) 9 Manufacturing services on physical inputs (goods) owned by others, other than (i), (ia), (ii), (iia) and (iii) above. 4
NOTIFICATION NO. 11/2017-CENTRAL TAX (RATE) Sl.No Chapter, Section, Description of Service Rate (per cent) Heading 25 (i) Heading 9987 Services by way of house- keeping, such as plumbing, carpentering, etc. where the 2.5 person supplying such service through electronic commerce Provided that credit of operator is not liable for . input tax charged on registration under sub-section goods and services has not (1) of section 22 of the Central been taken Goods and Services Tax Act, 2017. (ii) Maintenance, repair and 9 installation (except construction) services, other than ( i ) above. 5
JOB WORK UNDER GST Can the job worker in addition to the goods received from the principal, can use his own goods for providing the services of job work ? Yes, It is clarified in Para 5 of Circular No. 38/12/2018 dated 26th March, 2018 that the job worker, in addition to the goods received from the principal, can use his own goods for providing the services of job work. 6
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IN CASE OF MEDIATOR SERVICES Only A Coordinator or Facilitator GST to be charged @ 18% Principal XYZ LTD - not a For Making Necklace Issues Goldsmith Issues Metal / the same to Bullion GST to charged @5% Artisan A for Casting & Setting GST to charged @5% Artisan B for Rhodium Plating 8
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JOB WORK UNDER GST(SECTION 143) OPTION 1 : - Supply of Inputs / Semi finished Goods / CG by RP without Sec 143 NO ITC GST PRINCIPAL Job Worker - 04 OPTION 2: Supply of Inputs / Semi finished Goods / CG by RP under Section 143 NO PRINCIPAL Job Worker ITC - 04 GST Principal has choice to follow either of the options as above – Para 6 of Circular 38/12/2018 dated 26.03.2018. 10
JOB WORK UNDER GST(SECTION 143) Send Goods Under the Cover of GST Invoice for Processing Job Principal A worker B Rs. 100000 + GST Send Goods Under the Cover of GST Invoice After Processing Job Principal A worker B Rs. 110000 + GST As per the Second Proviso to Section 16 (2) of the CGST Act 2017, where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon, in such manner as may be prescribed 11
JOB WORK UNDER GST(SECTION 143) JOB WORK UNDER GST CAPITAL GOODS (CG) OTHER THAN INPUTS SENT TO MOULDS AND DIES, JIGS & FIXTURES OR JOBWORKER TOOLS SENT TO JOBWORKER Received back or direct Not Received back or Received back with Not Received back supply from the job directly supplied from THREE years from with THREE years worker premises within the job worker premises the date of it being from the date of it after ONE year from the ONE year from the date sent out being sent out date of it being sent out of it being sent out NO GST NO GST GST Payable GST Payable payable on payable on Deemed that CG Deemed that such had been supplied supply by supply by inputs had been by the principal to Principal to Job supplied by the Principal to Job principal to job worker job worker on the worker worker on the day when said day when said CG inputs were sent out were sent out 12
JOB WORK UNDER GST(SECTION 143) Pri rinci cipal for th the pu purpose of of job job work – Reg egistered Per erson(RP) wh who sen sends inputs/ Ca Capital Goo Goods wi without pa payment of of tax, x, to to a job job wor orker for or job job work – Se Sec 143 143(1) of of CGST Ac Act & Exp xplanation to to Sec 19 Se 19(7) of of CGST Ac Act. Pri rinci cipal ca can sen send inputs / Ca Capit ital Goo Goods to to a job job worker for or job job wor ork an and from th there subsequently to su to ano another job job worker wi without th the pa payment of of GS GST [Se Sec 143 143 (1)] )]. In Intimatio ion for or th the sam same ne needs to to be be giv given as as pe per th the co conditions pr prescr crib ibed. It It is is th the res esponsibil ility of of th the pr prin incip ipal to to incl clude th the de details of of all all th the challa lans rela lating to to goo oods se sent by by him him to to one one or or mor more job job worker or or from one one job job worker to to an another an and its ts return th therefrom. The FORM GS The GST IT ITC-04 04 wi will serve serve as as the the intimation as as en envis isaged und under sect section 143 143 of of the the CGS GST Act Act. Res esponsibilit ity for or kee eeping pr proper acc accounts for or In Inputs / Ca Capital Goo Goods se sent sha shall lie ie wi with th the Pri rinci cipal [Se Sec 143 143(2)] )]. In Inputs or or capital goo oods sha shall be be sen sent to to the the job job wor orker un under th the cover of of chall llan iss ssued by by th the Pri rinci cipal. The chall Th llan ha has to to be be iss ssued even wh when th the inputs or or ca capit ital goo oods ar are se sent dir directly to to th the job job worker. 13
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DELIVERY CHALLAN FOR JOB WORK Ser Seria ially Num umbered Deli Delivery ry ch challa lan iss ssued by by the prin princip ipal sha shall contain in the be belo low mentioned de detail ils (C (CGST Ru Rule 55 55):- 1. 1. Da Date an and nu number of of the deli delivery ry ch challa lan. 2. Nam 2. ame, ad address & GS GSTI TIN of of the consig ignor, if if reg egis istered 3. 3. Nam ame, ad address & GS GSTIN of of the consig ignee, if if reg egistered 4. 4. HS HSN cod ode & Des Descrip iption of of goo oods. 5. 5. Qu Quantity of of goo oods 6. 6. Taxable valu alue. 7. 7. Tax rate & Tax Amount . 8. 8. Pl Place of of su supply ly, in in cas ase of of in interstate movement. 9. 9. Si Signature. The de deliv livery cha challan sha shall be be pr prepared in in trip riplicate, in in cas ase of of su supply ly of of goo oods – 1. Or 1. Orig iginal copy be bein ing mark arked as as OR ORIGINAL FOR CONSIGNEE 2. 2. Du Duplicate cop opy be bein ing mark arked as as DU DUPLICATE TE FOR TRANSPORTER & 3. 3. Trip iplic icate copy be bein ing mark arked as as TRIPLICA CATE FOR CONSIGNOR 15
FORMAT OF DELIVERY CHALLAN 16
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INTIMATION FOR JOB WORK As per Section 143 (1) of the CGST Act, 2017 A registered person (hereafter in this section referred to as the "principal") may under intimation and subject to such conditions as may be prescribed, send any inputs or capital goods, without payment of tax, to a job worker for job work and from there subsequently send to another job worker …………… . As per Para 8.4(vi) of Circular No. 38/12/2018 dated 26th March, 2018 FORM GST ITC-04 will serve as the intimation as envisaged under section 143 of the CGST Act As per Rule 45 (3) of the CGST Rules, 2017 The details of challans in respect of goods dispatched to a job worker or received from a job worker or sent from one job worker to another during a quarter shall be included in FORM GST ITC-04 furnished for that period on or before the twenty-fifth day of the month succeeding the said quarter [ or within such further period as may be extended by the Commissioner by a notification in this behalf 18
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FORM GST ITC-04 (JOB WORK) 20
FORM GST ITC-04 (JOB WORK) Instructions: 1. Multiple entry of items for single challan may be filled Do we need to make entry for Accessories supplied to Job worker 21
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