Whether a principal is treated as manufacturer

[Yogesh Ashar]

Dear All

One client of ours doesn't own any factory, but undertakes 100% manufacturing done from job workers. The department is of the view as the assessee doesnot have any premises to undertake manufacture he cannot be treated as manufacturer to avail from refund under the inverted duty regime. Request the expert to share their views on the same.

Thank you

CA Yogesh Ashar

AI Summary

Principal liability under GST allows registered principals to claim inverted duty refunds despite manufacturing via job-workers.
A principal who engages job-workers remains the registered person responsible for GST liability and account maintenance; the job-work provisions do not require the principal to have manufacturing premises. Pre-GST authorities have treated principals or suppliers as manufacturers in suitable facts, and for purposes of claiming refund under the inverted duty structure the principal may file a refund claim irrespective of whether the process at the job-worker amounts to manufacture. Departments cannot demand conditions not laid down in law.