E-Way Bill Provisions for Job Work
Calendars lying on the desks have flipped to welcome the February month. E-way bill system will be rolled out from 1st February, making the life for tax evaders even more difficult.
E-way bill is a document which has details like name of consigner and consignee, their GSTIN numbers (if they are registered), description and value of goods in the consignment and transport details.
E-way bill has to be generated before initiating the movement of goods, and the transporter needs to carry it along with invoice during the movement of goods.
Cases where e-way bill has to be issued
E-way bill has to be issued in case of –
- Reasons other than supply (including job work)
Thus, if goods are sent for job work or received back from the job worker, the e-way bill has to be issued. Our today’s blog throws some light on the concept of job work, e-way bill issuance, and documents to be carried during movement of goods.
What is job work?
Job work is an integral part of several sectors since many businesses outsource a part of their manufacturing activities. Job work can include initial processing, further processing, assembling, packing or any other completion process.
Section 2(68) of CGST Act describes job work as a treatment or process undertaken by a person on goods belonging to another registered person.
GST on Job Work: Scenarios that may arise
There are certain scenarios that may happen related to job work –
- Inputs are sent by principal to the job worker
- Inputs are sent to the job worker directly from the vendor
- Inputs are received back by the principal after job work completion
- Finished goods are directly supplied to the customer from the job worker
The principal is eligible to claim input tax credit of (semi-finished goods/ raw materials) for job work. He can claim the input tax credit of the inputs even if they are sent to the job worker directly from the place of the vendor.
In both the cases, inputs must be received back by the principal within 1 year, else the input tax credit will be reversed.
Issuing e-way bills in case of job work
If the principal is located in a different state, and he is sending the goods to job worker who is located in another state, the principal has to generate the e-way bill compulsorily.
Threshold limit of Rs. 50,000 doesn’t apply in this case, hence even if the value of goods sent to job worker is less than Rs. 50,000, the principal has to generate the e-way bill.
E-way bill for goods returned after job work
Once the job work has been completed on goods, the principal can either receive back the goods or can ask the job worker to supply the goods directly to the customers.
If the job worker is registered on e-way bill portal, he will generate e-way bill for the movement of goods, and if he isn’t registered, the principal has to generate the e-way bill.
For supplying the goods directly from the place of job worker to the customers, it is necessary that –
- Job worker should be registered u/s 25 or,
- The principal should declare the place of job worker as his additional place of business.
In this case also, if the job worker is registered, he will issue the e-way bill otherwise the principal has to issue the e-way bill and provide it the transporter.
Document to be issued before sending goods for Job Work
If goods are sent for job work, there is no need to issue any tax invoice. Instead, a delivery challan can be issued for the goods. Delivery challan will contain following details –
- Date and number of the delivery challan,
- Name, address, and GSTIN of the consignor (principal) and the consignee (Job Worker). GSTIN has to be mentioned if the consignor/ consignee is registered under GST.
- HSN code and description of the goods,
- Taxable Value
- Tax rate and tax amount
- Place of supply, if there is inter-state movement of goods,
Documents to be carried by the transporter during movement
During the movement of goods, the transporter needs to carry following documents –
- E-way bill copy
- Delivery Challan
- Invoice Copy (if the goods are directly sent to the job worker from the vendor’s place