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(2023) 2 Centax 245 (Article)

(2023) 2 Centax 245 (Article)

Jobwork Under GST - Ready Reckoner
By

R. MURALIDHARAN
FCA

Introduction :-

Jobwork in GST is an important area as many Industries do their work on Jobwork basis only. The Author discusses few
important intricacies in this Article on Jobwork.

I. What is Jobwork ?

Section 2(68) of the CGST Act 2017 defines Jobwork as 'any treatment or process undertaken by a person on goods
belonging to another registered person'.

The one who does the said job would be termed as 'job-worker'.

The ownership of the goods does not transfer to the job-worker but it rests with the principal.

The job worker is required to carry out the process specified by the principal, on the goods.

II. Job Work Procedural aspects :-

(a) A registered person (Principal) can send inputs / capital goods under intimation and subject to certain
conditions without payment of tax to a job worker.
(b) Principal can send inputs or capital goods directly to the job worker without bringing them to his premises.
(c) However, inputs and / or capital goods sent to a job worker are required to be returned to the principal within
1 year and 3 years, respectively.
(d) After processing of goods, the job-worker may clear the goods to :
♦ another job worker for further processing
 ♦ send the goods to any of the place of business of the principal without payment of tax;
♦ remove the goods on payment of tax within India or without payment of tax for export outside India
on fulfilment of specified conditions.
III. Jobwork Vs. Repairs and Maintenance :-

(a) Jobworker's place is mentioned as additional place whereas in R and M it is not.

(b) Time limit for returning the goods is there in Jobwork whereas it is not there in R and M.
(c) Jobworker if Registered can pay GST and clear the goods where as in R and M it is not possible.
(d) Jobwork can result in Manufacture where as in R and M it is not possible.
(e) Scrap may be returned back in Jobwork whereas it is not possible in R and M.
IV. JOBWORKER - REGISTERED / UNREGISTERED :-

Service provider Service recipient GST Rate

Registered Job Worker Registered person 12%
Registered Person Unregistered Person 18%
Unregistered Person Any person (registered or unregistered) No GST
V. Ready Reckoner :-

Details Taxability
Agricultural - Intermediate No GST. [Notfn. No. 12 / 2017 / 28.6.2017] (including cultivation of Plants and
Production process - Job Worker rearing of animals)
Loading / Unloading of Rice No GST
Intimation about Jobwork Inputs, 25th day of month suceeding the Quarter.
Capital Goods can be Directly Yes. [Sec 19(2) / 19(5)]
sent to Jobworker place
E way Bill Inter State Jobwork even if value is Rs. 1, e way bill is a must. [Rule 55(3) / Rule
138(1)]. Principal / Jobworker, any body can prepare Eway bill.
Return of Goods Input = 1 Year ; Capital Goods = 3 Years. If not returned it is treated as Sale along
with interest CBIC 38 / 12 / 2018 / 26.3.2018 [2018 (11) G.S.T.L. C3]
Jobwork to Foreign Principal No GST. [Sec 13(3)(a) / 1.2.2019].
A = Principal = TN For Scrap Sold by A = CGST + SGST
B = Jobworker = TN

A = TN For Scrap Sold by A = IGST (at B's Place)

B = Kerala

Moulds / Dies / Jigs / Fixtures / Need not be returned. Jobworker can sell as scrap and pay GST. Principal can sell
Tools as scrap and pay GST Circular No. 38 / 12 / 2018.
Turnover less than Rs. 20 Lakhs. Notification No. 7 / 2017 / 14.4.2017.
Jobwork can do Inter State Job
Work without GST
Value to be mentioned in e way Only value of Goods.
bill / DC
What will not come under (a) Repairs and Maintenance. [Alok Bhanuka 2019 (23) G.S.T.L. 375
Jobwork ? (A.A.R. - GST – W.B.) = (2019) 73 GST 512 AAR - WB].
(b) If the Jobwork results in Manufacture
(c) Buying and using all inputs and working for Brand Owner will not
come under Jobwork. [United Breweries Ltd. - 2018 (14) G.S.T.L.
546 (A.A.R. - GST - Kar.) = (2018) 69 GST 210 (AAR – Kar)].

Whether Jobworker to Jobworker Yes. Time restriction. Maximum = 1 Year; Capital Goods = 3 Years
can be moved.
Jobworker can add some material Permitted. [Prestige Engineering 1994 (73) E.L.T. 497 (SC)]
VI. Some Job Work Rates - GST Rates on manufacturing Services (which includes job work) :-

♦ Jobwork or processing printing of newspapers, textile and textile products, Books, hides and skins and
leather, manufacture of leather goods or footwear printing of paper products where GST rate is NIL
or 5%, gold, silver, precious stones, platinum (but not diamonds), hides, food items, clay bricks,
handicraft goods - GST rate 5%.
♦ Jobwork or processing of manufacture of umbrellas and printing of paper products where GST rate is
12% - GST rate 12%.
♦ Jobwork on diamonds falling under Chapter 71 - GST rate 1.5% [CGST 0.75% plus SGST / UTGST
0.75% or IGST 1.5%] sender of inputs must be registered person.
♦ Jobwork in relating to bus body building - GST rate 18% - Sender of inputs must be registered person.
♦ Jobwork other than above, when inputs sent by registered person - GST rate 12%.
♦ Manufacturing services of tailoring - GST rate 5%
♦ Manufacturing services on physical inputs (goods) owned by others [other than above], where inputs
sent by unregistered person - GST rate 18%.
♦ Other manufacturing services, publishing, printing and reproduction services, material recovery services
would attract GST rate of 18%
Concessional rate of 5% for certain Job work :-

In the case of job work relating to printing, textile, jewellery and hides and skins, handicrafts, processing of foods etc.,
the GST rate is 5%.

(a) Printing of newspapers

(b) Textiles and textile products falling under Chapters 50 to 63 in the First Schedule to the Customs Tariff Act,
1975.
(c) All products other than diamonds, falling under chapter 71 of Customs Tariff Act, 1975 [Pearls, precious and
semi-precious stones, precious metals (like gold, silver, platinum) and their Artilce, imitation jewellery.
(d) Printing of books (including Braille books), journals and periodicals.
(e) Printing of all goods falling under chapter 48 or 49 which attract GST rate of 5%
(f) All food and food products falling under chapters 1 to 22 of Customs Tariff Act
(g) All products falling under Chapter 23 of Customs Tariff Act [residues and waste from food industries,
prepared animal fodder] except dog and cat food put up for retail sale falling under heading 2309 10 00
(h) Manufacture of handicraft goods.
VII. Circulars :-

Board vide Circular No. 38/12/2018, dated 26.03.2018 has elaborately clarifed many issues related to Jobwork.

Circular No. 88 / 07 / 2019 dated 01.02.2019 [2019 (21) G.S.T.L. C3] has amended certain portions of earlier Circular
No. 38 / 12 / 2018 dated 26.03.2018 [2019 (31) G.S.T.L. C3]

Circular No. 126 / 45 / 2019 - GST dated 22.11.2019 has clarified scope of certain notification entry, related to job work,
of Notification No. 11 / 2017-Central Tax (Rate) dated 28.06.2017.

Conclusion :-

Jobwork has many more complicated issues. Only the important ones have been discussed above.

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