Job work includes repairing

[Asked by Guest]

Hi,

My client is a retailer of watches, The customers get their watches for repairing. Client sends them for repairing to other vendors. My question is whether it can be considered as job work. Please note : the client (principal ) is not a manufacturer.

[KASTURI SETHI]

 

Dear Querist,

No. Both 'job work' and 'repair service of goods' are entirely different concepts under GST. Repair of goods (watches) fall under GST Tariff Code 9987 (998722) and job work of goods falls under HSN 9988. Actually job work is completion of goods by way of manufacturing activity. Mainly it is concerned with manufacture of goods. Job work is a service in GST Act.

Job work [Section 2(68) of CGST Act, 2017]. - “Job work” means any treatment or process undertaken by a person on goods belonging to another registered person and the expression “job worker” shall be construed accordingly.

Whether ' Any treatment or process' is to be termed as job work or not , depends upon facts and circumstances of each case but in the situation explained by you, it is not job work.

[YAGAY and SUN]

We endorse the view of Kasturi Sir.

[KASTURI SETHI]

M/s.YAGAY AND SUNS,

Thank you, Sir.

Dear Kasturi

Thank you for your clarification.

[Abhishek Sethi]

Job work can only be done on behalf of registered persons. Assuming Customers who come over for repair are unregistered (likely scenario), service from Client to Customer shall be treated as repair service only.

In instant case, goods belonging to Customer are given to another vendor by Client - thus question may arise as to what is the relevance of word 'belonging' in definition of job work - Will it mean legal ownership or can cover physical possession also? If answer is limited to former, then such transaction to be treated as repair service only.

If qualified as job work, need to comply with GST ITC 04 as well as E-Way Bill

Kind regards,
Abhishek

[KASTURI SETHI]

The word, 'belonging' in the definition of job work stands for legal ownership.

AI Summary

Job work definition excludes retail repair consignments, making such transactions repair services with registration and compliance consequences.
Repair of goods forwarded by a retailer to third party vendors is not job work where the goods belong to customers who are not the registered principal; job work requires treatment on goods legally owned by another registered person and is distinct from repair services, and where job work does apply it triggers job work documentation, input tax credit reconciliation and e way bill compliance.