FAQ ON JOB WORK

GST Update 21.10.2016

FAQ ON JOB WORK

GST DAILY DOSE OF UPDATION:-

FAQ ON JOB WORK:- This update covers clarifications issued for provisions pertaining to job work.

Question no. 2:-It is clarified that the supply of goods by a registered taxable person to job-worker shall not be regarded as supply of goods and consequently, no GST is payable on goods supplied by registered principal to the job-worker.

Question no. 3:-The goods may also be sent from one job-worker to another job-worker and so on subject to certain condition. This provision is also presently there in Central Excise Laws wherein goods may be sent from one job-worker to another job-worker. The only difference is that under earlier law there was no requirement of permission of job work. Even the provision of intimation prior to job work was deleted under Rule 4(5)(a) of job work Rules. But now the permission is required from Commissioner under GST law.

Question no. 4:-The job worker will be required to obtain registration if his aggregate turnover exceeds the prescribed threshold. But the goods supplied under job work will not be considered while calculating the aggregate value.

Question no. 6:-The principal can supply the goods directly from the premises of the job worker without bringing it back to his own premises on the condition that principal should have declared the premises of such job-worker as his additional place of business in his registration application or job worker is registered person or goods sent are as such notified.

Question no. 8:-The principal shall be entitled to take credit of inputs sent to a job-worker if the said inputs, after completion of job work are received back within 180 days from the date of being sent out. In case of capital goods sent to job-worker, the time limit shall be 2 years. The amount of input tax credit availed on such inputs is required to be paid along with interest if the inputs/capital goods sent on job work are not received back by the principal within the stipulated time period. The credit can be re-claimed when the inputs are actually received back. It is worth noting that although section 16A of Model GST Law provides for reclaim of input tax credit and interest both, the clarification issued in FAQ only speaks about input tax re-credit. Nonetheless, the provisions contained in Model GST Law will prevail over the clarifications of FAQ.

Question no. 9:-The provisions relating to job work are applicable only when registered taxable person intends to send taxable goods. These provisions are not applicable when exempted/non-taxable goods are sent or principal is not registered. Although under Central Excise, the exempted small scale manufacturer claiming exemption of Rs. 1.5 crore under notification 8/2003-C.E. dated 1.3.2003 and as amended can send goods under notification 83/2004 and 84/2004 but this facility is not available under GST law. Hence, the supply by non taxable person will be added in his aggregate value and job worker will also have to add the same in his aggregate value also if he is not registered.

We will carry some other questions in our next update.

You may also visit our FB page at the following link

https://www.facebook.com/GSTTODAYBYPRADEEPJAIN/

Comments

GST Update 21.10.2016

Post a Comment

Query