Job-work refers to the processing of goods supplied by the principal. The concept of job-work already exists in Central Excise, wherein a principal manufacturer can send inputs or semi - finished goods to a job worker for further processing.

The GST Act makes special provisions with regard to removal of goods for job-work and receiving back the goods after processing from the job-worker without the payment of GST. The benefit of these provisions shall be available both to the principal and the job worker.


Section 2(68) of the CGST Act, 2017 defines job-work as ‘any treatment or process undertaken by a person on goods belonging to another registered person’.

The person who executes the above job is called ‘job worker’.

Job work procedure

  1. A registered person (principal) may send any inputs or capital goods , without the payment of tax, to a job worker for job work and from there subsequently send to another job worker and likewise send to another job worker.


  1. The principal may send the inputs to the job-worker at two stages as given below:

i. Without carrying out any process of such inputs. In such cases, inputs are sent in raw form to the job worker.

ii. After carrying out any process on such inputs. In this situation, intermediate goods arising from any treatment or process carried out on the inputs, are sent to the job worker. The said treatment is done by either the principal or by the job worker.


  1. The principal shall bring back the inputs or capital goods (other than moulds and dies, jigs and fixtures or tools) within 1 year and 3 years, respectively, from the date of sending such goods to the job-worker, without payment of any tax.


  1. The principal shall supply the inputs or capital goods, on payment of tax within India and without payment of tax for export, from the place of business of a job worker within 1 year and 3 years, respectively. The time of supply will be from the date of sending such goods to the job-worker.


  1. In order to give effect to point (d), i.e in order to send the goods to a third party from the place of business of a job worker, it shall be necessary for the principal to declare the place of business of the job-worker as additional place of business. However, the principal can make such supply without declaring the place of business of the job-worker as additional place of business in the following two circumstances :


i. Where the job – worker is registered under the Act, or

ii. Where the principal is engaged in the supply of such goods as may be notified by the Commissioner.


  1. Before supply of goods to the job-worker, the principal would be required to intimate the Jurisdictional Officer containing the details of the description of inputs intended to be sent by the principal and the nature of processing to be carried out by the job-worker. The said intimation shall also contain the details of the other job-workers, if any.


  1. The inputs or capital goods shall be sent to the job worker under the cover of a challan issued by the principal. The challan shall be issued even for the inputs or capital goods sent directly to the job-worker. The challan shall contain the details specified in Rule 10 of the Invoice Rules.


  1. The responsibility for keeping proper accounts for the inputs or capital goods shall lie with the principal.


  1. Where the inputs or capital goods (other than moulds and dies, jigs and fixtures or tools) are not received back by the principal or not supplied to third party from the premises of the job worker, within  1 year and 3 years, respectively, from the date of sending such goods to the job-worker , then it shall be deemed that such inputs had been supplied by the principal to the job-worker on the day on which the said inputs were sent.

 Input Tax credit on goods supplied to job worker

 The principal (a person supplying taxable goods to the job worker) shall be entitled to take the        credit   of input tax paid on inputs sent to the job-worker for the job-work. Further, the principal can take the credit even when the goods have been directly supplied to the job-worker without being brought into the premise of the principal. The principal need not wait till the inputs are first brought to his place of business.

Supply of waste and scrap generated during job work

Waste or scrap generated at the premises of the job-worker may be supplied

  1. directly by the registered job-worker from his place of business on payment of tax or
  2. such waste may be cleared by the principal, in case the job-worker is not registered.

It is necessary to add here, that when the job-worker supplies the waste and scrap on payment of tax, he makes the said supply on behalf of the principal. It is to be noted here that the credit of any inputs contained in the waste or scrap is availed by the principal but the tax shall be paid by the job worker.


Transitional provisions


In case any inputs or semi-finished goods had been removed before the appointed date from the factory of the manufacturer and sent to a job worker for carrying further processing, testing, repair or for a similar purpose, and the same is received on or after the appointed date, no tax shall be payable if the following conditions are satisfied:

  • Underlying goods are returned to the factory within 6 months from the appointed date (extendable for a maximum period of 2 months).
  • Declaration of the goods held by job worker is done in specified form and manner
  • Supply of semi-finished goods or finished goods is done only on payment of tax in India or the goods are exported out of India within 6 months from the appointed date (extendable by not more than 2 months).

If the underlying inputs, semi-finished goods or finished goods are not returned within 6 months or extended period, ITC availed earlier under existing laws will be recovered.

Other important points about job work

  1. A job worker is a supplier of services and will be obliged to take registration only when his turnover exceeds the prescribed threshold of Rs.20/10 lakh.
  2. The goods of the principal directly supplied from the job worker’s premises will be included in the aggregate turnover of the principal and not the job worker.
  3. The provisions relating to job work are applicable only when registered taxable person intends to send taxable goods. In other words, these provisions are not applicable to exempted or non taxable goods or when the sender in an unregistered person.
  4. Job work provisions is not compulsory. It is not mandatory for the principal to follow the job work provisions. The principal can send the inputs or capital goods after payment of GST without following the special procedures of job work. In such a case, the job – worker would take input tax credit and supply back the processed goods (after completion of job work) on payment of GST.
  5. The job worker and principal can be located either in the same state or in same Union Territory or in different states or Union Territories.

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