waste & scrap supplied by Job Worker, Goods and Services Tax - GST

[Vinod Maheswari]

I have a query regarding section 143(5) which says

"Notwithstanding anything contained in sub-sections (1) and (2), 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"

Now if Job worker is registered and if he is paying some consideration to principal for that waste and scrap than whether Principal is exempt from raising invoice to Job worker and can ask Job worker to supply waster and scrap and pay relevant tax according to section 143(5).(Its means it will be supply in Job worker account).

If answer is Yes than what about be treatment of consideration received by principal for such waste and scrap as section 7 says consideration received will be treated as supply .

Thanx

Posts / Replies

[KASTURI SETHI]

In my view, answer is no . As per definition of the phrase '''job worker", job worker always works for and on behalf of principal.

[Adarsh Gupta]

Principal to raise Tax invoice - refer Circular No 38/12/2018

[Vinod Maheswari]

Dear Mr Gupta

Please note that section 143 (5) start with "Notwithstanding anything contained in sub-sections (1) and (2)" and circular 38 says regarding supply as per section 143 (1) and 143(2) . As section 143(5) overwrite these sub section power so how can we say Principal has to compulsory raise invoice for waste & Scrap.

Please comments

[Adarsh Gupta]

Refer para 9.4 (ii) & 9.4 (iii) of circular..it is clear, I don't see any ambiguity.

[Vinod Maheswari]

Sir in case of supply of Input or capital goods from place of jobworker there is no doubt that principal has to issue invoice but in case of waste & scrap generated during process of such input & capital goods law is providing special section 143(5) which overwrite power of section 143(1) and (2) which talks only about of supply of input or capital goods and not about waste and scrap . So According to section 143(5) in my view job work can issue invoice in his account but my main issue is if Principal is getting some considerations have than can he avoid to issue invoice by referring section 143(5)

[Ganeshan Kalyani]

Reproducing the extract from the circular

Removal of waste and scrap generated during the job work: Sub - section (5) of Section 143 of the CGST Act provides that the waste and scrap generated during the job work may be supplied by the registered job worker directly from his place of business or by the principal in case the job worker is not registered. The principles enunciated in para (ii) above would apply mutatis mutandis in this case.