Job Work procedure

[Murari Agrawal]

We are a job worker. Due to capacity constraint, we intend to get some job work done from another job worker who is situated at the same address in a separate premises.

Inputs received from Principal will be unloaded from the carrier directly to that job worker & after completion of job, final product will be loaded on carrier for delivery directly from that premises to the Principal. We shall not bring the inputs or the final product to our premises and we shall not be doing any process on the inputs.

My queries:

1) Is it allowed under the GST rules

2) If yes, can we issue a delivery challan to the job worker on the date of receipt of inputs giving the same vehicle no. or some other process is to be followed

3) Can we issue a delivery challan to the Principal for removal from the job worker’s premises

4) Any other requirement to follow

Note: Since both of us are situated in the same location, we don’t need to hire a separate carrier for movement of goods. Thanks

[YAGAY andSUN]

Please refer Circular No.38/12/2018 dtd. 26th March, 2018 and Circular No. 126/45/2019-GST dtd. 22nd November, 2019 in this regard.

[KASTURI SETHI]

Query-wise reply is as under :-

1. Yes.See Rule 45 of CGST Rules, 2017 as amended.

2.Yes.

3.Yes

4. Procedure mentioned in Board's Circulars (posted by M/s.Yagay and Sun, Sir) and also read C.B.I. & C. Circular No. 88/07/2019-GST, dated 1-2-2019

[Ganeshan Kalyani]

Yes, it is allowed under GST law. I agree with both the experts.

AI Summary

Job work subcontracting under GST permitted; delivery challans may be used for transfers between job workers and to the principal. Subcontracting of job work to another job worker at the same address is permitted; inputs may be delivered directly to the receiving job worker and finished goods despatched directly to the principal. A delivery challan can be issued to the receiving job worker on receipt and to the principal on removal from the job worker's premises, subject to the procedural and documentary requirements in the job-work rules and relevant GST circular guidance.