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GST - Job Work under GST

Goods and Services Tax - GST - By: - CA Akash Phophalia - Dated:- 13-8-2016 Last Replied Date:- 11-5-2017 - Editorial Note Model GST law has provided special procedure for removal of goods from principal manufacturer to job worker and return from job worker to principal manufacturer subject to certain conditions and limitations. This article aims at enlightening readers about the provisions related to job work. Introduction The definition of supply is very wide and had covered almost all sorts o .....

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be construed accordingly [clause 2(62) of Model GST Law, 2016.] Thus job work means any person who undertakes any activity or carried on any process on goods belonging to another person. Such other person necessarily be a registered taxable person. If the person is unregistered one then the job work relation could not be established under GST law. Further, goods sent for job work should be taxable goods as duty liability will arise only when goods under consideration are taxable. Meaning of Prin .....

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er to another job worker without payment of duty. Time limit for receipt of goods back from job worker Section 43A which provides for special procedure for removal of goods on job work does not specify any time limit for receipt of goods back However, another provision contained in clause 16A specifies time limit for receipt of goods. Accordingly, inputs should be received back within the period of 180 days of receipt of goods by job worker. Further, this time limit in respect of capital goods i .....

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place of job worker The goods shall not be permitted to be supplied from the place of business of a job worker unless the principal declares the place of business of the job-worker as his additional place of business. However, there is some exception to it. In a case-(i) where the job worker is registered under section 19; or (ii) where the principal is engaged in the supply of such goods as may be notified in this behalf; goods can be supplied directly from the place of business of job worker b .....

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ork, are received back by him within one hundred and eighty days of their being sent out: The principal shall be entitled to take credit of input tax on inputs even if the input are directly sent to a job worker for job-work without their being first brought to his place of business, and in such a case, the period of one hundred and eighty days shall be counted from the date of receipt of the inputs by the job worker. Input tax credit of capital goods sent to job worker - The principal shall, su .....

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ess, and in such a case, the period of two years shall be counted from the date of receipt of the capital goods by the job worker - clause 16A(2) of GST Model Law, 2016. If inputs and capital goods not received back in specified time Where the inputs or capital goods, as the case may be, are not received back by the principal within the time specified, he shall pay an amount equivalent to the input tax credit availed of on the said inputs or capital goods, along with interest under section 36(1) .....

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