What is the Job Workers?

A Job Workers is the person who manufactures goods on behalf of some other person.

Example:-

Suppose i have a factory. It is not necessary that all the manufacturing or processing is done by me. Some of it may be outsourced to some other person, like coloring, dyeing, repairing. This person is called Job Workers.

Normal Case  (No Job Worker).jpg

 

Goods Received by Factory and Sent to Job Worker for Processing.jpg


What is meant by Goods Sent Directly to Job worker?

Suppose manufacturer purchases the goods from A LTD 

He ask A LTD not to delivered to goods to him, but sent directly to the Job worker, this is called goods sent directly to Job Worker.

 


Goods Sent Directly to Job workers and.jpg

 

Goods Sent Directly to Job workers.jpg


In GST, Can the Manufacturer take input on Goods Received directly by Job worker?

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What are the time period of Return of Goods?

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What is statutory compliance to be made in case of goods sent to Job worker

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In GST,Can the Manufacturer take input on Goods Received directly by Job worker?


Input can be taken by Manufacturer on the Date Goods are Received by Job Worker

However,it should be received by Factory or Sold from Job Worker premised within 1 year of Receipt of Goods

If not received back or sold within 1 year,then it will be Deemed that Goods were sold to Job worker and duty will be paid on it to gather with interest

This interest shall be calculated from date of receipt of goods

this period is 3 years in case of Capital Goods

Example - 1

A Ltd
Invoice Date :17 Sep 2017
Purchase of Raw Materials 15000
CGST 9% 1350
SGST 9% 1350
Total 17700

Goods are Received at Job Worker premises on 19 Sep 2017 for manufacturing

After manufacturing,goods are receipt in factory on 29 Oct 2017

Sale of goods was made on 31 Oct 2017 as follows

My CO
Invoice Date :31 Oct  2017
Sale of Finished Goods 24000
CGST 9% 2160
SGST 9% 2160
Total 28320

On What Date,Input will be Available

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Prepare GST Computation for September and October

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What is last date till which Goods should be received back in factory

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  1. GST - Goods and Services Tax, India
  2. GST Computation & Accounting

About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 10 years. He also provides Accounts Tax GST Training in Delhi and Pune.