Job Work [Tax at time of receiving Goods]

[Kishan Barai]

Suppose A does job work of B , then do A have to pay GST on B Goods at the time of receiving goods from B to A [Stock Transferred]. It is obvious that A will charge 18% GST for his services but what if A is URD & B is Registered Dealer ?? It is obvious that B will pay 18% reverse charge of GST but what about stock Transferred.

Kindly elaborate both the senerios considering A as Registered Dealer & URD

Thank You

[Guest]

According to Section 143(1) of Goods and Services Tax Act, 2017,

1. A registered person may under intimation and subject to such conditions as may be prescribed, 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.

2. A registered person should bring back such inputs or capital goods after completion of job work or otherwise, within 1 and 3 years respectively to any of his/her place, without payment of tax.

3. A registered person may also supply such inputs or capital goods after completion of job work or otherwise, within 1 and 3 years respectively from the place of jobworker within India or export, subject to such conditions.

4. Where the inputs or capital goods are not received back or supplied within one year or three years respectively, it shall be deemed that such inputs or capital goods had been supplied by the principal to the job worker on the day when they are sent out.

Ans:

1. Hence Mr. B as a registered dealer may send goods without payment of tax to Mr. A job worker, irrespective of registered or not.

2. Alternatively, Mr. B can send the goods after payment of GST without following the above procedure. In such a case, the job worker would take the input tax credit and supply back the processed goods on payment of GST.

AI Summary

Job work stock transfer rules allow tax-free dispatch to job worker, with return deadlines and deemed supply consequences. Section 143(1) permits a registered principal to send inputs or capital goods to a job worker without payment of tax subject to conditions; such goods must be brought back or supplied within specified periods (one year for inputs; three years for capital goods) or they are deemed to have been supplied by the principal on the day sent. Alternatively the principal may send goods after paying GST, allowing the job worker to take input tax credit and account for GST on the processed supply back.