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Job work in gst, Goods and Services Tax - GST

Issue Id: - 117289
Dated: 20-6-2021
By:- PAWAN BANSAL
Job work in gst

  • Contents

We sold one item of pack of 2. Now purchaser asking to send one item of pack of 1 instead of one item of pack of 2........purchaser will return one item of pack of 2 and selller will send then one item of pack of 1 . .. .. ..

Can we consider this type of work as job work? ?

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Showing Replies 1 to 4 of 4 Records

1 Dated: 21-6-2021
By:- KASTURI SETHI

There are three parameters to qualify as job work transaction and these are as under:-

1. The ownership of the goods does not transfer to the job worker and the ownership remains with the principal.

2. Any treatment or process to be undertaken by the job-worker on the goods belonging to another registered person.

3. The job worker is required to carry out the process as per specification given by the principal.

If any one of the conditions is not fulfilled by you, you will not conform to the definition of job work defined under Section 2(68) of CGST Act.

In the situation given by you, the ownership is transferred. The activity mentioned by you is also not covered under 'any treatment or process'. You may be thinking about 'any treatment'.

Hence this transaction or activity cannot be called job work.


2 Dated: 21-6-2021
By:- YAGAY andSUN

In addition to aforesaid reply, this is a purely sale-purchase transaction and does not come under the purview of job-work. If any items are send back by the purchaser then it will be treated as sales return by you and purchase return by the purchaser. Such items can be rejected on the basis quality/quantity or for any other reason and should be accounted for accordingly.


3 Dated: 21-6-2021
By:- ABHISHEK TRIPATHI

Dear Pawan Ji,

In addition to the above, it seems like a case of sales return.

Now, the query being such transaction be considered as job work on querist part. If the purchaser has not accepted the goods, he simply can't give them to the querist for job work. However, contending the goods are accepted by the recipient and given back to bifurcate into ‘one item one pack’. Then will it amount to JW? In such a situation querist has to cross the hurdle of establishing that such bifurcation amounts to treatment or process. Will be hard to establish as treatment or process. Refer KS Sirs beautiful explanation.

Querist may simply consider this as sales return and comply with the law accordingly. Registered purchase – issue credit notes and for unregistered declare the same in GSTR-1.


4 Dated: 21-6-2021
By:- Shilpi Jain

Agree. It is in the nature of purchase return and require to invoice again when the goods are sent back to the purchaser. In such case the seller issues a credit note and the a sale invoice again.

Unless the purchaser accepts the goods and sends it to the seller on a challan to work on the goods and return it back. In such a case it could be a job work as well. But what is the use of treating it as a job work. Only that ur compliance will increase.


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