Valuation of job work

[Nikhil Oltikar]

Circular on clarification of issues on job work dt 26th March 2018.

Point 9.4 sec (iii) allows for the waste and scrap to be supplied by the job worker if the job worker is registered under GST. Often, job working charges are so negotiated with principal because the job worker is allowed to dispose the scrap and retain the proceeds.

In this situation, should the job worker add the value of scrap to the job working charges while invoicing the principal for job work?

If yes, the job worker is already disposing the scrap upon payment of GST. If the value of the scrap is added to job working charges, then will it not be a case where GST is paid twice on the scrap?

AI Summary

Should Job Workers Include Scrap Value in Invoices? Avoid Double GST Payment, Says Ganeshan Kalyani. A discussion on a forum addresses whether a job worker should include the value of scrap in job work charges when invoicing the principal under GST regulations. The issue arises from a GST circular allowing job workers to supply waste and scrap if registered. One respondent, Ganeshan Kalyani, argues that the value of scrap sold by the job worker should not be added to the job work charges to avoid double GST payment on the scrap. The conversation involves clarifying GST implications on job work and scrap disposal.