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Input Tax Credit on Job Work sector is the significant sector in the Indian Economy. It includes outsourced activities which may or may not convert into manufacture. Job Work means processing of goods by the principal.
The introduction of GST has made special circumstances for removal of goods for job worker and receive the goods back after processing without payment of GST which will benefit both the principal and the job worker.
As per Section 2(68) of the CGST Act, Job work means any process or treatment undertaken by a person on goods belonging to another registered person. In such a case the ownership of the goods rests with the principal. The person doing the work is called the job worker.
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It is a form that contains details regarding the inputs or capital goods sent and received back from such job worker. This form has to be filed by the registered manufacturer/principal sending inputs or capital goods on job every quarter.
It must include the details of challans in respect of:
GST ITC-04 is a quarterly form that must be furnished on or before 25th of the month succeeding the quarter. The details to be furnished in it is of two parts-
Goods sent to job worker and goods received from the job worker.
Thus a considerable amount of time is provided to the job worker for returning the goods to the principal under GST which helps to maintain transparency in claiming the input tax credit.
Read our article:
Valuation rules under GST: An Overview
Ashish M. Shaji has done his graduation in law (BA. LLB) from CCS University. He has keen interests in doing extensive research and writing on legal subjects especially on corporate law. He is a creative thinker and has a great interest in exploring legal subjects.
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