JOB WORK OF BIDI MADE OF TOBACCO.

[Ashwin Bhalakiya]

Dear Sir

My friend who is registered under gst , supply tobacco and packing material to a manufacturer by delivery chalan by stating as job work for making hand made bidi . Manufacturer uses its own bidi leaves, labour, establishment,etc and send then to my friend sale bill of hand made bidis (HSN 2403) by charging 28% gst. Along with bill MFG also enclose consumption details of tobacco and packing material which sent by my friend . The same is accounted in my friends books. Then after he sales finished bidi in Market by charging 28% gst. He takes the Input credit of purchase of bidi.

My query whether this arrangement comes under job work for my friend and manufacturer.

Whether my friend is liable for ITC 04. Is this arrangement in GST is correct.

Experts are requested to pl reply.

Ashwin

AI Summary

Job-work classification for bidi manufacturing affects GST liability and requires the principal to discharge tax and file prescribed returns.
Job-work in bidi manufacture is a contract manufacturing arrangement where the principal retains ownership of inputs and finished goods and is liable for tax; deviations from delivery-challan procedures by invoicing finished goods constitute procedural noncompliance but do not alter substantive tax liability, and the principal must ensure payment of applicable GST and excise duties and file the prescribed job-work return.