GST on Job Work contract executed by two registered dealers

[UDHAYKUMAR KANDASAMY]

My client owns a Dyeing Factory where he receives goods grey fabrics for Dyeing work through other registered job work contractors.

My client undertakes job work upto the stage of washing the grey fabrics. Is it possible to have dual job work contractors in a single job work process?

[Sadanand Bulbule]

Plz refer Section 2[68] and 143 of the CGST Act.

Yes, it is legally possible for two (or more) registered job work contractors to handle the same goods in sequence as part of a single overall job work process, provided: •

The principal issues delivery challans for each movement as per Rule 45.

• Both contractors are registered and issue tax invoices for their services.

• Time limits for return of goods to the principal (1 year for inputs, 3 years for capital goods) are complied with under Section 143(1).

Section 143 allows multiple job works under proper documentation like e-way bill/t delivery challan/tax invoice wherever required.

[KASTURI SETHI]

Yes. It is allowed. Also must  go through Boards Circular Nos. 38/12/2018-GST dated 26.03.2018 and 88/07/2019-GST dated 1.2.2019 for detailed procedure.

[Ganeshan Kalyani]

I agree with the view of the experts

[Shilpi Jain]

Taxation laws cannot define how business should be done.

AI Summary

Dual job work under GST is permitted when sequential contractors comply with registration, invoicing, delivery challans and return obligations. Dual participation of registered job work contractors in a single job work chain is permitted provided the principal issues delivery challans for each movement, both contractors are registered and issue tax invoices, and time limits for return of goods to the principal (one year for inputs and three years for capital goods) are observed; requisite transport and transaction documentation such as e-way bills, delivery challans and tax invoices must accompany each movement.