Job-work sector constitutes a significant industry in Indian economy. It includes outsourced activities that may or may not culminate into manufacture. The term Job-work itself explains the meaning. It is processing of goods supplied by the principal. The concept of job-work already exists in Central Excise, wherein a principal manufacturer can send inputs or semi-finished goods to a job worker for further processing.
Many facilities, procedural concessions have been given to the job workers as well as the principal supplier who sends goods for job-work. The whole idea is to make the principal responsible for meeting compliances on behalf of the job-worker on the goods processed by him (job-worker), considering the fact that typically the job-workers are small persons who are unable to comply with the discrete provisions of the law.
Meaning of Job Work
‘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’.
That means the ownership of the goods is rest in the hands of principal and the job worker is responsible to do the process work on the goods specified by the principal.
What Are the Procedural Aspects of Job Work ?
Input Tax Credit on goods supplied to job worker
As per sec 19 of the CGST Act 2017, the principle has the responsibility to take the credit of input tax on the inputs sent to the job worker for a job work.
And also the principal can take the credit even when the goods have been directly supplied to the job-worker without being brought into the premise of the principal.
What is the Time Limits for the Return of Processed Goods ?
What is the Extended Meaning of Input ?
As per sec 143 of the CGST Act 2017 where certain process is carried out on the input before removal of the same to the jobworker, such product after carrying out the process is to be referred as the intermediate product. Such intermediate product can also be removed without payment of tax.That means both intermediate and input products can be cleared without payment of duty to job worker.
What are Waste Cleaning Provisions ?
What are the Transitional Provisions under Job Work ?
Read the full text of the Concept Note below.