Direct Delivery from job worker - Valuation

[Kaustubh Karandikar]

XYZ (Supplier as well as Job Worker), supplying the goods to PQR but physically goods will remain with XYZ being a job worker also. PQR will issue a job work challan to XYZ. After manufacturing the finished goods, XYZ to issue a ‘Service Invoice’ to PQR for the job work charges where the value will be only of the job work charges and not the selling price of PQR to his customer. Goods will be directly supplied from XYZ’ premises to the customer of PQR under a Tax Invoice of PQR and on the value at which PQR selling the goods to his customer. Goods will move from XYZ’s premises under the cover of Delivery Challan of XYZ and E – Way Bill and Tax Invoice of PQR. Is this correct?

[Rajagopalan Ranganathan]

Sir,

According to first proviso to Section 143 (1) of CGST Act, the principal shall declare the premises of job worker as principal's additional palace of business. If the job worker is registered under Section 25 then the above condition is not applicable. The principal can remove the finished goods directly from the premises of job worker under this invoice and no challan need be issued by the job worker. e-way bill has to be issued as per the procedure prescribed.

[Ganeshan Kalyani]

In case goods moves from XYZ to PQR's customer, then tax invoice issued by PQR to its customer PQR and its supporting e-way bill of same value should accompany the vehicle.

[CA HemanthKumar]

Tax invoice issued by PQR along with e way bill raised on the basis of this tax invoice would suffice for movement of goods.

AI Summary

Direct delivery from job worker: principal's tax invoice and e way bill must accompany goods, no job worker challan required. Principal-issued tax invoice and corresponding e way bill at the principal's sale value must accompany goods moved directly from the job worker's premises to the principal's customer; no separate challan by the job worker is required when the principal has declared the job worker's premises as an additional place of business, although that declaration is not required where the job worker is subject to the specified registration provision. The job worker should invoice only the job work service charges to the principal.