GST Jamku AICHAPTER XXI
MISCELLANEOUS
Job work procedure.
Section 143(1)
A registered person (hereafter in this section referred to as the "principal") may under intimation and subject to such conditions as may be prescribed, send any inputs or capital goods, without payment of tax, to a job worker for job work and from there subsequently send to another job worker and likewise, and shall,—
(a) bring back inputs, after completion of job work or otherwise, or capital goods, other than moulds and dies, jigs and fixtures, or tools, within one year and three years, respectively, of their being sent out, to any of his place of business, without payment of tax;
(b) supply such inputs, after completion of job work or otherwise, or capital goods, other than moulds and dies, jigs and fixtures, or tools, within one year and three years, respectively, of their being sent out from the place of business of a job worker on payment of tax within India, or with or without payment of tax for export, as the case may be:
Provided that the principal shall not supply the goods from the place of business of a job worker in accordance with the provisions of this clause unless the said principal declares the place of business of the job worker as his additional place of business except in a case—
(i) where the job worker is registered under section 25; or
(ii) where the principal is engaged in the supply of such goods as may be notified by the Commissioner:
Provided further that the period of one year and three years may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding one year and two years respectively.
A registered person, referred to as the "principal," can send inputs or capital goods to a job worker without paying tax. The principal can even send them from one job worker to another. The principal must:
- Bring back inputs within one year and capital goods within three years to any of their places of business without paying tax.
- Supply these inputs or capital goods within one year and three years, respectively, after being sent out, either within India or for export, with or without tax payment.
Conditions and Exceptions
The principal should not supply goods from a job worker's place of business unless:
- The principal declares the job worker's place as an additional business place, except when the job worker is registered under section 25 or when the principal is engaged in supplying specific goods as notified by the Commissioner.
Extension Possibility
If there's a valid reason, the Commissioner may extend the one-year and three-year periods by up to one year and two years, respectively.
Conclusion
Understanding the job work procedure becomes simpler when we focus on sending goods, the conditions to be met, and the exceptions that apply. This ensures compliance with Section 143(1) while facilitating smooth business operations.
Section 143(2)
The responsibility for keeping proper accounts for the inputs or capital goods shall lie with the principal.
To "keep proper accounts" involves recording relevant information about inputs or capital goods, such as their quantity, value, movement, usage, and any related transactions. This practice ensures transparency, compliance with regulations, and facilitates effective management of resources.
Section 143(3)
Where the inputs sent for job work are not received back by the principal after completion of job work or otherwise in accordance with the provisions of clause (a) of sub-section (1) or are not supplied from the place of business of the job worker in accordance with the provisions of clause (b) of sub-section (1) within a period of one year of their being sent out, it shall be deemed that such inputs had been supplied by the principal to the job worker on the day when the said inputs were sent out.
When materials are sent for job work, the principal must ensure their timely return. If, for any reason, the inputs are not received back within a year after completion of the job work or as per the stipulations in sub-section (1), it is considered that the principal supplied these inputs to the job worker on the day they were dispatched.
Now, let's break down this provision.
Timely Return of Inputs
Upon completion of job work, the principal expects the inputs to be returned promptly. The provision emphasizes that this return should happen within a year. This ensures efficiency in the job work process.
Deemed Supply
If, for some reason, the inputs don't find their way back within the specified timeframe, the law deems that the principal has, in essence, supplied these inputs to the job worker on the day they were initially dispatched. This provision helps maintain accountability and clarity in the job work dynamics.
In summary, Section 143(3) of the job work procedure highlights the importance of timely return of inputs and introduces the concept of deemed supply to address situations where this return doesn't happen within the prescribed timeframe.
Section 143(4)
Where the capital goods, other than moulds and dies, jigs and fixtures, or tools, sent for job work are not received back by the principal in accordance with the provisions of clause (a) of sub-section (1) or are not supplied from the place of business of the job worker in accordance with the provisions of clause (b) of sub-section (1) within a period of three years of their being sent out, it shall be deemed that such capital goods had been supplied by the principal to the job worker on the day when the said capital goods were sent out.
In the realm of taxation, specific provisions are in place to govern job work procedures, ensuring clarity and adherence to guidelines. One such provision is detailed under Section 143(4).
Capital Goods in Job Work
When capital goods are dispatched for job work, with the exception of moulds and dies, jigs and fixtures, or tools, certain conditions must be met. If these capital goods are not returned to the principal in accordance with clause (a) of sub-section (1) or not supplied from the job worker's place of business as specified in clause (b) of sub-section (1) within three years from their dispatch, a significant implication arises.
Deemed Supply
In such cases, it is deemed that the principal has supplied these capital goods to the job worker on the day they were initially sent out. This provision aims to establish a clear timeline and accountability in the job work process.
Understanding and adhering to these regulations is crucial for businesses involved in job work, ensuring compliance with the stipulated timelines and avoiding unintended consequences.
Section 143(5)
Notwithstanding anything contained in sub-sections (1) and (2), any waste and scrap generated during the job work may be supplied by the job worker directly from his place of business on payment of tax, if such job worker is registered, or by the principal, if the job worker is not registered.
Explanation.—For the purposes of job work, input includes intermediate goods arising from any treatment or process carried out on the inputs by the principal or the job worker.
This rule helps to make sure everyone understands what needs to be considered when dealing with leftover stuff from job work and what counts as input in the whole process.
In the job work process, sometimes there's leftover stuff like waste or scrap. Section 143(5) talks about what to do with this extra stuff.
Registered Job Worker: If the person doing the job work is officially registered, they can sell the waste or scrap directly from their workplace, but they have to pay taxes on it.
Unregistered Job Worker: If the job worker is not officially registered, then the main person (we call them the principal) has to deal with selling the waste or scrap.