Possible scenarios and example for job work returns
E-way bill for job work
Hey everyone, in this post we will look at the E-way bill for the job work.
The post will cover the following topics:
What is Job work?
Job work is the specified process done by a person on the semi-finished goods or raw materials that are owned and provided by the principal manufacturer. This process is carried out as per the instructions are given by the manufacturer.
What is the E-way bill for job work?
An E-Way bill is an electronic document for the movement of goods from a supplier to the recipient. In the case of the movement of goods for job work, the e-way bill must be generated by every registered person whose goods value exceeds Rs. 50, 000 even if it is not for the supply of goods.
The E-way bill has to be made for the flow of goods for job work. However, for the interstate movement of goods, the e-way bill will be generated either by the principal manufacturer or by the registered job worker.
Documents to be issued prior to sending the goods for Job Work
E way bill is generated on the basis of delivery challan. Thus it is a simple as well as standardised process compared to filling each state’s declaration forms, waybills, and permits which would dampen the business growth beyond their state.
A Challan needs the following details;
- Date and number of delivery challan.
- Name, address, and GSTIN of the consignor and consignee.
- HSN code, description, and quantity of goods.
- Taxable value, tax rate, tax amount (CGST, SGST, IGST, UTGST separately)
- Place of supply and signature.
Challan details are seen in Form GSTR-1. Therefore, the details of the challan are filed through Form GST ITC – 04 and it is submitted by the 25th day of the month succeeding the quarter.
For instance: G (Principal) sends goods of value Rs. 2,00,000 to H (job worker), then G should prepare a delivery challan and generate the e-way bill on the basis of delivery challan and the value to be entered will be Rs 2,00,000.
E-way bill on Job Work: Scenarios that may arise
- Inputs issued by the principal manufacturer to the job worker.
- When inputs are delivered to the job worker directly from the vendor.
- The inputs are collected back by the principal manufacturer, after completing job work.
- The job worker supplies finished goods directly to the customer.
Inputs issued by the manufacturer to the job worker
In the first scenario, if the principal/manufacturer and the job worker are situated in 2 different states then the principal must generate the e-way bill for the job worker even if the value of the goods is less than the threshold limit of Rs. 50,000.
Inputs received back by the manufacturer from the job worker
When the principal/manufacturer is receiving the input back from the job worker, they can accept the finished goods or ask the job worker to supply them directly to the customer.
If the job worker is registered on E- way portal, they can generate their own e-way bill. In case the job worker is not registered, the manufacturer needs to generate the e-way bill for the job worker.
Direct supply of finished goods to the customer by the job worker
When a job worker supplies finished goods to the customer from his business place;
- The job worker must be registered under section 25 or
- The principal must declare the job worker’s place as his additional place of business.
Finally, a consignor can claim an input tax credit on half-finished products or raw materials for job work. It is plausible even if the goods are sent to the job worker directly from the vendor’s place. The inputs should be returned to the consignor within 1 year or else the input tax credit will be inverted.
Example of E-way bill for job work
Now let us take an example for the application of the GST E-way bill for job work in our everyday life.
For instance, Q of Aurangabad sends goods for job work to P Jaipur and the value of consignment is Rupees 20,000 therefore, an e-way bill is generated by Q as the cities are situated in two different states. The above rule of goods exceeding over Rs. 50,000 is not applicable here.
But if the transport of goods or services worth Rs. 40,000 are happening within a single state, like from Gurgaon to Mehrauli then an e-way bill is not generated by the supplier to the customer as the value of goods is below Rs. 50,000 according to the law.
Related: Job work under GST
You can also see how this works in Saral GST
We have come to the end of the post on the E-way bill for job work. We love to hear from you. Share your opinion and feedback in the comment section below.