GST on JOB work Charges

[Narendra Soni]

Dear Expert,

Please suggest whether GST is applicable on Job Work Charges raised by Job worker.

Urgent reply is appreciated

[Vijay kumar]

The GST is payable by the job worker on the conversion charges and not by the principal. Post-threshold exemption, JW will charge GST from the principal, who can take credit of the same and utilize the same for payment of tax on his outward supplies. Under Sn.143, the exemption available to Principal is from the supplies of unprocessed goods and receipt of processed goods.

[JSW CEMENTLIMITED]

In my opinion, in stead of opting for job work, you can supply RM/Inputs on payment of GST to Jobworker and subsequently after processing jobworker can supply the final jobworked product on payment of GST which will be inclusing of jobwork charges. But, in this case, the jobworker must get registered under GST. In case jobworker is not registered, exemption from payment of GST has been granted to principle supplier and not jobworker. Jobworker has to charge GST on his service of Job work which will be available as credit to principle supplier.

[MohanLal tiwari]

One of our Public sector customer is supplying used & rejected machinery part on job work basis for supply of fresh machinery part (castings) in job work basis. To manufacture fresh machine part (castings), few other raw materials are to be required to be used.

Please advise if such manufacturing activities can be done under job challan.

[Ganeshan Kalyani]

GST is not applicable on material part as that is covered within the conditon prescribed. However the job work charges is subject to GST.

Sir, I want to send a motor to third party for service. what is the provision and documentation i have to follow to fulfill GST compliance. Earlier we were following Cenvat credit rule4(5a) and two challan(Part-1 filled by sender and part-II filled job worker) issued along with material. original challan copy retained by job worker and material returned to us along with duplicate for transporter challan.

AI Summary

Job work taxation under GST: job worker service charges are taxable while principals may claim input credit for that tax.
Job work services are taxable under GST and the job worker must charge GST on processing charges; the principal may send inputs or capital goods to a job worker and retrieve them without payment of tax under the prescribed job work procedure, but that exemption covers the goods movement and not the job worker's service charge. Intra unit movements within the same GST registration are not treated as job work between distinct persons. Registration threshold rules determine whether the job worker must register and charge GST, and any GST charged by the job worker is available as input tax credit to the principal.