Job Work rules

[Guest]

Section 2(68) of the CGST Act, 2017 defines job work as ‘any treatment or process undertaken by a person on goods belonging to another registered person’. The one who does the said job would be termed as ‘job worker’. The ownership of the goods does not transfer to the job worker but it rests with the principal. The job worker is required to carry out the process specified by the principal, on the goods.

MyQuery is : It is immaterial as to whether the job worker undertakes job work in his premises or in the premises of service receiver.? and which say with Rules and section Please can provided it.

[DR.MARIAPPAN GOVINDARAJAN]

It is immaterial whether the job worker undertakes jon work in the premises of the principal or in the premises of service receiver. It is my view.

[KASTURI SETHI]

The following points are to be considered:

(i) Rules 45 and 55 of CGST Rules, 2017 talk of sending goods for job work by way of delivery challan.

(ii) E-way bill is also required for movement of goods meant for job work under Rule 138 (1) of CGST Rules, 2017.

(ii) Job work in the premises changes the entire scenario inasmuch as the activity would be covered the category of 'Manpower Supply'.

In view of the above, Job work in the premises of Principal/owner is not allowed, if done it will take of shape erstwhile BAS category/supply of Manpower.

[KASTURI SETHI]

All the above factors are hinting at separate premises. Even separate registration is required for doing job work, if turnover exceeds threshold exemption limit.

[Guest]

He'll sir,

Thank you for your reply, but sir if one job work forming work of principles and for some work he entered into contract with other and who performing there job on the premises of job worker. As job worker can employee other job worker for the completion of principles job as there is no provision in section of job work. Can this contract is treated as job work (supply of labour) and if not what will the treatment?

[KASTURI SETHI]

Goods received by the job worker from the Principal can be sent to another job. Since the said goods can be sent to another job worker, the same can jobbed(completed) by hiring an other person in your premises. It depends upon job worker whether to get the job completed through casual labour, employee or through Contractor/manpower supply. This is between job worker and Contractor, casual labour or employee, whatever the case may be.

For gaining more knowledge, pl. go through the Board's circular (appended below) word for word:-

Job work - Issues related to job work under CGST Act, 2017 - Clarification

Circular No. 38/12/2018, dated 26-3-2018

[Guest]

Thank you, Sir Kasturi. Really informative post and explained the points so well. I would not be able to find this information online. Thank you so much. I learned something new today!

AI Summary

GST Classification of Job Work: Location Irrelevant, but Principal's Premises May Signal 'Manpower Supply' per Section 2(68) CGST Act. MJ Enterprises initiated a discussion on the Goods and Services Tax (GST) concerning job work, defined under Section 2(68) of the CGST Act, 2017. The main query was whether the location of job work, either at the job worker's or the principal's premises, affects its classification. Responses highlighted that the location is immaterial, but job work at the principal's premises could be categorized as 'Manpower Supply'. Rules 45 and 55, and Rule 138(1) of the CGST Rules, 2017, were cited, emphasizing the necessity of delivery challans and e-way bills. It was also noted that job workers could subcontract tasks.