Cir No. G-2 / 02 / 2018

Cir No.G- 2 / 02 /2018                                                                                                                6th April  2018




Dear Sir,


We would like to inform you that Central Board of Excise & Customs (CBEC), GST Policy Wing has issued Circular No. 38/2018-GST dated 26/03/2018 providing Clarifications on a Number of Issues related to Job work. The main thrust and gist of these Clarifications is briefly outlined as below: -

  • Scope/ ambit of Job work
    • Sending Goods for Job work is not a Supply as such
    • Job work is a treatment or Process undertaken by the Job worker on the Goods belonging to another Registered Person (Principal).
    • Job worker, in addition to the Goods received from Principal can use his own Goods also for providing the Service of Job work
  • Registration
    • The Principal has to be Registered.
    • The Job worker may or may not be Registered.
    • The Job worker is Exempted from Registration if his aggregate Turnover on all India basis in a Financial year does not Exceed the threshold Limit (20 Lakhs or 10 Lakhs as the case may be) irrespective of whether the Principal and the Job worker are located in the same State or in the different States.
  • Documentation
    • Movement of Goods from Principal to only One Job worker and back
      • Principal shall prepare the delivery Challan in triplicate
      • Principal shall send Two copies of Challan to the Job workers along with Goods.
      • The Job worker while Returning the Goods shall also send One copy of the Challan. 
  • Movement of Goods from One Job worker to another Job worker
    • Under Challan issued either by the Principal or the Job worker, or
    • Job worker may endorse the Challan issued by the Principal.
  • Return of Goods from the Job worker to the Principal
    • Shall be accompanied by One copy of the Challan received by the Job worker from the Principal.
    • Direct Supply from the Supplier to the Job worker
      • Invoice by the Supplier in the Name of the Buyer (Principal).
      • Job worker’s Name and Address to be mentioned in the Invoice as Consignee
      • Principal to Issue Challan in favor of Job worker.
    • Goods Returned by Job worker in piecemeal
      • Job worker will have to Issue a fresh Challan as the Challan issued by the Principal cannot be endorsed in this case.
    • Submission of ITC 04
      • ITC 04 shall have to be submitted by the Principal only.
    • E-way bill
      • Can be generated either by the Principal or Job worker
      • However, if the Job worker is Un Registered E-way bill shall be generated by the Principal
  • Liability to issue Invoice, Determination of Place of Supply and Payment of GST
    • Supply of Job work Services by Job worker
      • Job worker to issue invoice and pay GST
      • Value shall Include Job work Charges plus Value of any Goods and Services used by him for Supplying the Job work service, if Recovered from the Principal.
      • Value of Dies, Jigs and Fixtures or Tools supplied by the Principal may not be included in the Value of Job work Service provided its Value has already been factored in the Price for the Supply of such Services by the Job worker. 
  • Supply of Goods (including Waste and Scrap) by the Principal from the Job worker’s Premises
    • The Principal is considered as the Supplier
    • The Time, Value and Place of Supply shall be Determined in the hands of the Principal irrespective of the Location of Job worker’s Premises.
    • Invoice is to be issued by the Principal.
    • In case of Exports LUT or Bond as the case may be shall be executed by the Principal
    • Non-receipt of Goods/ Capital Goods back from the Job worker within One/ Three Years
      • This shall supply be treated as Supply by the Principal to the Job worker.
      • Principal shall issue an Invoice for the same and Declare such Supplies in the Return for the Month in which One / Three years have expired.
      • The Date of the Supply shall be the Date on which Goods were initially sent to the Job worker.
      • GST along with Interest for the intervening shall be Payable by the Principal.
      • In case Inputs/ Capital Goods are Returned by the Job worker after One / Three years, this will be treated as a Supply by the Job worker to the Principle and the Job worker (if Registered) shall pay GST.
  • Availability of ITC to the Principal and Job worker
    • ITC is available to Principal irrespective of whether the Inputs or Capital Goods are received by the Principal and then sent to Job worker or they are directly Received at Job worker’s Premises without bringing to the Premises of the Principal.
    • Job worker is also legible to avail ITC on Inputs etc. used by him in Supplying the Job work Services if he is Registered.

 We are also enclosing herewith a copy of the said Circular for your Information.

Thanking you,

Yours truly,

P. Chandrasekharan

Encl : As Stated

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