Come FAQ with  answer on Job Work  based on interpretation of the relevant sections of GST Act 2017.
Since we have received multiple calls from   across the country.
Q 1. What is job-work?
Ans. Section 2(62) of the GST Act 2017 provides that “job-work” means undertaking any treatment or process by a person on goods belonging to another registered taxable person and the
expression “job-worker” shall be construed accordingly. This definition is much wider than the one given in Notification No. 214/86 – CE dated 23rd March, 1986 as amended, wherein job-work has been defined in such a manner so as to ensure that the activity of job-work must amount to manufacture. Thus the definition of jobwork itself reflects the change in basic scheme of taxation relating to job-work in the proposed GST regime.
Q 2. Whether goods sent by a taxable person to a job-worker will be treated as supply and liable to GST? Why?
Ans. No. It will not be treated as a supply. In terms of proviso to Para 5 of Schedule I of the GST Act  the supply of goods by a registered taxable person (principal) to jobworker, in terms of Section 43A, shall not be regarded as supply of goods. Therefore, it can be inferred that no GST shall be applicable on the goods supplied by the registered principal to a job-worker.
Q 3. Can a registered taxable person send goods without payment of tax to his job-worker?
Ans. Yes. Section 43A of the GST Act provides that the registered taxable person (principal) can send the taxable goods to a job-worker for job-work without payment of tax. He can further send the goods from one job-worker to another job-worker and so on subject to certain condition. It may be noted that provisions of Section 43A are not applicable if non-taxable or exempted goods are proposed to be sent for job-work.
Q 4. Is a job-worker required to take registration?
Ans. Yes, as a Job-worker would be a supplier of services, he would be required to obtain registration if his aggregate turnover exceeds the prescribed threshold.
Q 5. Whether the goods of principal directly supplied from the job-worker’s premises will be included in the aggregate turnover of the jobworker?
Ans. No. It will be included in the aggregate turnover of the principal.
Q 6. Can the principal supply the goods directly from the premises of the job-worker without bringing it back to his own premises?
Ans. Yes but with a rider that the principal should have declared the premises of such job-worker as his additional place of business or where the job-worker is a registered person or where the goods have been notified.
Q 7. Under what circumstances can the principal directly supply goods from the premises of job-worker?
Ans. The goods can be supplied directly from the place of business of job-worker without declaring it as additional place of business in two circumstances namely where the job-worker is a registered taxable person or where the principal is engaged in supply of such goods as may be notified in this behalf.
Q 8. What are the provisions concerning taking of ITC in respect of inputs/capital goods sent to a job-worker?
Ans. In the GST Act , aspects relating to taking input tax credit in respect of inputs/capital goods sent for job-work have been specifically dealt in Section 16A, which provides that
the credit of taxes paid on inputs or capital goods can be taken in the following manner: Principal shall be entitled to take credit of inputs sent to a job-worker if the said inputs, after completion of job-work are received back in 180 days from the date of being sent out. In case the inputs are sent directly to the job-worker, the date shall be counted from the date of receipt of inputs by job-worker. Further an amount equivalent to the input tax credit availed on such inputs has to be paid along with interest, in case the inputs are not received back within the specified time. The credit can be reclaimed when the inputs are actually received back.
Q 9. Are the provisions of job-work applicable to all category of goods?
Ans. No. The provisions relating to job-work are applicable only when registered taxable person intends to send taxable goods. In other words, these provisions are not applicable to exempted or non-taxable goods or when the sender is a person other than registered taxable person.

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