As per Earlier Laws:
- When the goods are manufactured in job worker premises, the manufacturer has to give a declaration under notification no. 214/86 dated 25.03.1986 to claim exemption from payment of excise duty.
- The declaration has to be given to the AC/DC of central excise having jurisdiction over the factory of the job worker.
- Manufacturer has to send the goods through challan under Rule 4(5)(a) of Cenvat credit rules, 2002 by filling part-1.
- The job worker has to fill the part-2 while sending the goods back to the manufacturer.
In GST Regime:
Section 143 of CGST Act, 2017 prescribe the Job work procedure as under-
(1)Principal may under intimation 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 within 1 year or capital goods within 3 years to any of his place of business without payment of tax, or
b.Supply goods directly from the job-worker premises with payment of tax, if such place is declared as his additional place of business. Declaration is not required if the jo-worker is registered under the GST.
(2)The responsibility for keeping proper accounts for the inputs or capital goods shall lie with the principal.
(3)It shall be deemed that the goods has been supplied to job-worker if such goods are not returned within the time limit prescribed above.
(4)Notwithstanding anything contained in sub-section (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.
Rule 45 of CGST Rules, 2017 prescribes the conditions and restrictions in respect of inputs and capital goods sent to the job worker as under-
(1)The inputs, semi-finished goods or capital goods shall be sent to the job worker under the cover of a challan issued by the principal, including where such goods are sent directly to a job-worker.
(2)The details of the challans in respect of goods dispatched to a job worker or received from a job worker to another during a quarter shall be included in Form GST ITC-04 furnished for that period on or before the 25th of the month succeeding the said quarter.
Rule 55 of CGST Rules, 2017 prescribes that the transportation of goods to the job worker can be done through the Delivery challan.
“The consignor may issue a delivery challan, serially numbered not exceeding sixteen characters, in one or multiple series, in lieu of invoice at the time of removal of goods for transportation, containing the following details, namely:-
- (i)date and number of the delivery challan;
- (ii)name, address and Goods and Services Tax Identification Number of the consigner, if registered;
- (iii)name, address and Goods and Services Tax Identification Number or Unique Identity Number of the consignee, if registered;
- (iv)Harmonized System of Nomenclature code and description of goods;
- (v)quantity (provisional, where the exact quantity being supplied is not known);
- (vi)taxable value;
- (vii)tax rate;
- (viii)place of supply, in case of inter-State movement; and
For the purpose of the above, the word “consignor” means the person who is sending the goods to the other party through a transport. The other party will be treated as a consignee.
Therefore, when the job worker is sending the goods back without tax, then he has to issue delivery challan for the movement of the goods to the principal.