TMI BlogClarification on issues related to Job Work.X X X X Extracts X X X X X X X X Extracts X X X X ..... gistered person on whose goods (inputs or capital goods) job work is performed is called the Principal for the purposes of section 143 of the WBGST Act. The said section which encapsulates the provisions related to job work, provides that the registered principal may, without payment of tax, send inputs or capital goods to a job worker for job work and, if required, from there subsequently to another job worker and so on. Subsequently, on completion of the job work (by the last job worker), the principal shall either bring back the goods to his place of business or supply (including export) the same directly from the place of business/premises of the job worker within one year in case of inputs or within three years in case of capital goods (except moulds and dies, jigs and fixtures or tools). 3. It may be noted that the responsibility of keeping proper accounts of the inputs and capital goods sent for job work lies with the principal. Moreover, if the time frame of one year / three years for bringing back or further supplying the inputs / capital goods is not adhered to, the activity of sending the goods for job work shall be deemed to be a supply by the principal on the da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... choice whether or not to avail or not to avail of the benefit of these special provisions. 6.1 Doubts have been raised about the requirement of obtaining registration by job workers when they are located in the same State where the principal is located or when they are located in a State different from that of the principal. It may be noted that the job worker is required to obtain registration only if his aggregate turnover, to be computed on all India basis, in a financial year exceeds the specified threshold limit (i.e. ₹ 20 lakhs or ₹ 10 lakhs in case of special category States except Jammu Kashmir) in case both the principal and the job worker are located in the same State. Where the principal and the job worker are located in different States, the requirement for registration flows from clause (i) of section 24 of the WBGST Act which provides for compulsory registration of suppliers making any inter-State supply of services. However, exemption from registration has been granted in case the aggregate turnover of the inter-State supply of taxable services does not exceed ₹ 20 lakhs or ₹ 10 lakhs in case of special category States except Jammu K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... auses movement of goods of consignment value exceeding fifty thousand rupees even in cases where such movement is for reasons other than for supply (e.g. in case of movement for job work). As per notification issued by the Commissioner of State Tax under rule 138(14)(d) vide No. 13/2018-C.T./GST dated 06.06.2018 the value limit is one lakh rupees in case of intra-State movement of goods without passing through any other state. Further, as per notification No. 14/2018-C.T./GST dated 12.07.2018 issued by the Commissioner of State Tax, generation of e-waybill under the West Bengal Goods and Services Tax Rules, 2017 for an intra-State movement of goods is exempted where such goods are being sent to a job-worker for job work or are being sent from one job-worker to another job-worker or are being returned to the principal after such job work, and where such transportation is not for final delivery of the finished goods. But the third proviso to rule 138(1) of the WBGST Rules provides that the e-way bill shall be generated either by the principal or by the registered job worker irrespective of the value of the consignment, where goods are sent by a principal located in the State to a job ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g them to the principal. The FORM GST ITC-04 will serve as the intimation as envisaged under section143 of the WBGST Act, 2017. (ii) Where goods are sent from one job worker to another job worker : In such cases, the goods may move under the cover of a challan issued either by the principal or the job worker. In the alternative, the challan issued by the principal may be endorsed by the job worker sending the goods to another job worker, indicating therein the quantity and description of goods being sent. The same process may be repeated for subsequent movement of the goods to other job workers. (iii) Where the goods are returned to the principal by the job worker: The job worker should send one copy of the challan received by him from the principal while returning the goods to the principal after carrying out the job work. (iv) Where the goods are sent directly by the supplier to the job worker: In this case, the goods may move from the place of business of the supplier to the place of business /premises of the job worker with a copy of the invoice issued by the supplier in the name of the buyer (i.e. the principal) wherein the job worker s name and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pal, or supplied from the place of business / premises of the job worker within a period of one / three years, as the case may be, it would be deemed that such inputs or capital goods (other than moulds and dies, jigs and fixtures or tools) have been supplied by the principal to the job worker on the day when the said inputs or capital goods were sent out. Further, the job worker is liable to pay GST on the supply of job work services. 9.3 The provisions relating to time of supply are contained in sections 12 and 13 of the WBGST Act and that for determining the value of supply are in section 15 of the WBGST Act. The provisions relating to place of supply are contained in section 10 of the IGST Act, 2017. Further, the provisions relating to the issuance of an invoice are contained in section 31 of the WBGST Act read with rule 46 of the WBGST Rules . 9.4 On conjoint reading of all the provisions, the following is clarified with respect to the issuance of an invoice, time of supply and value of supply: (i) Supply of job work services: The job worker, as a supplier of services, is liable to pay GST if he is liable to be registered. He shall issue an invoice at the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time, value and place of supply would have to be determined in the hands of the principal irrespective of the location of the job worker s place of business/premises. Further, the invoice would have to be issued by the principal. It is also clarified that in case of exports directly from the job worker s place of business/premises, the LUT or bond, as the case may be, shall be executed by the principal. Illustration : The principal is located in State A, the job worker in State B and the recipient in State C. In case the supply is made from the job worker s place of business / premises, the invoice will be issued by the supplier (principal) located in State A to the recipient located in State C. The said transaction will be an inter-State supply. In case the recipient is also located in State A, it will be an intra-State supply. (iii) Supply of waste and scrap generated during the job work: Sub - section (5) of Section 143 of the WBGST 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 enu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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