Recoating of jigs

[Guest]

Dear Experts,

1) We manufacture jigs and clear it by charging 18% GST. Sometimes the consignee send the jigs back for re-coating it. The consignee prepares a returnable gate pass without mentioning any rate or value in it.

2) Sometimes we get jigs of other consignee's for re-coating and some sort of simple repair like straightening the hooks.

There is a negligible rate increase while sending the re-coating jigs to the consignee. My querry is should we prepare tax invoice with G S T charged or should we prepare only challan without charging G S T in it. Secondly, what should we do in the second case ?

[YAGAY andSUN]

such jigs should move on Delivery Challan as it is amounting to Job work. GST is chargable on such activities.

[Ganeshan Kalyani]

This is job work. Material received under delivery challan shall be sent back after repair under delivery challan. You have to raise tax invoice with GST on the job work charges.

[Guest]

Thanks for the prompt reply. But, I would like to bring to your kind attention here that consignee sends the jigs for re-coating on a returnable gate pass without mentioning the rate or value if any. So if we charge G S T once again on already applied G S T materials (jigs) then, won't it be a double taxed materials. Secondly, there is only a mere addition of valuation and the product remains the same. I would like to ask the experts here that if we tell the consignee to send the jigs for re-coating purpose on tax invoice with G S T applied, then, we can avail the ITC and send the jigs with G S T charged along with tax invoice. Can we do the transaction in this manner ?

[YAGAY andSUN]

GST is a advanced form of VAT. It is creditable unless untill supply of goods/services reaches till the ultimate consumer. Therefore in our view there would not be double levy.

AI Summary

Job work GST chargeable; issue tax invoice for job work charges and claim input tax credit, avoiding double levy. Re coating and minor repairs of jigs are treated as job work. Such movements should be effected under delivery challans and the service provider must issue a tax invoice charging GST on the job work charges. Input tax credit is available on the GST charged for the job work, and charging GST on the service component is not considered double taxation where the supply has not reached the ultimate consumer.