Form ITC 04 Job Work- A Complete Guideline

What is Job Work?

As per section 2(68) of the Central Goods and Service Tax (CGST) Act, 2017 job work means “any treatment or process undertaken by a person on goods belonging to another registered person.”

 In simpler terms, Job work means undertaking a process or working on inputs / raw materials / semi-finished goods provided by the principal manufacturer to the job worker.

Example – In automobile industry, raw material alloy is sent to a third person for processing them into parts required for the final product. This third person is called the job worker and the raw material provider is the principal manufacturer.

Input Tax Credit on Job Work 

Section 19 of the CGST Act, 2017 defines provisions for input tax credit (ITC) that be claimed on inputs and capital goods sent for job work.

The provision states that  Input Tax Credit can be availed by the principal manufacturer or the registered person in respect of goods (inputs or capital goods) sent for job work purpose.

However, it is not mandatory that the goods shall be first brought to the place of business of the principal manufacturer or the registered person before sending the same to the job worker.

Further Rule 45(3) of CGST Rules, 2017 states that every principal manufacturer is required to file Form GST ITC-04 wherein details of challans in respect of goods sent or received to / from a job worker or sent to another job worker shall be mentioned.

Time limit to receive Goods from Job worker

Time limit to receive Goods from Job worker

The principal manufacturer shall receive goods within the time limit as mentioned below –

  • Inputs – Within 1 year from effective date
  • Capital Goods – Within 3 years from effective date

Example – In automobile industry, raw material alloy is sent to a third person for processing them into parts required for the final product. This third person is called the job worker and the raw material provider is the principal manufacturer.

Effective date means -

Where goods are sent from principal manufacturer’s place of business

Date on which goods are sent to the job worker

Where goods are sent from place other principal manufacturer’s place of business eg. Supplier

Date on which are received by the job worker

Exception to time limit -

This rule does not apply in case of moulds, dies, jigs and fixtures or tools sent to a job worker for carrying out job work 

Consequence of not receiving within Time limit -

Where goods are not received within the time limit as specified above, such goods shall be treated as supply from effective date and the principal manufacturer shall be liable to pay tax on such goods.

 Challan issued for job work shall be treated as invoice for such supply.

Direct Sale from Job Worker’s Place

Principal Manufacturer can directly supply goods from job worker’s place of business if principal manufacturer declares job worker’s place as his additional place of business.

However, he may not do so if –

  • The job worker is registered
  • The principal supplies goods which are specifically notified by the Commissioner to be allowed to sell directly from job worker’s place.

Records to be maintained by the Principal Manufacturer

Records to be maintained by the Principal Manufacturer

The responsibility for maintaining proper accounts and records lies with the principal manufacturer.

The principal manufacturer is required to issue challan for every dispatch made to the job worker. Details of such challan shall be disclosed and filed through Form GST ITC 04.

Details to be mentioned in Challan –

Challans are issued not only in case when goods are sent to job worker by a principal manufacturer but also when goods are sent from one job worker to another job worker.
  • Date and number of challan
  • Name, address and GSTIN of the consigner and consignee
  • HSN Code, description and quantity of goods sent
  • Taxable Value, tax rate, tax amount. Tax amount for CGST, SGST and IGST shall be separately mentioned.
  • Place of supply
  • Signature of authorised person

Challans are issued not only in case when goods are sent to job worker by a principal manufacturer but also when goods are sent from one job worker to another job worker.

Form GST ITC 04

Form GST ITC 04 contains details of inputs and capital goods sent to and received from a job worker. This form needs to be filed by every principal manufacturer who is sending goods for job work on quarterly basis.

Details in this form are required to be updated on the basis of challan issued by the principal manufacturer for –

  • Goods sent to a job worker
  • Received from a job worker
  • Sent from one job worker to another

Due date of Form GST ITC 04

The due date for filing Form GST ITC 04 is the 25th day of the month following the quarter for which the return is to be filed.

Example – For quarter April to June, return is to be filed by 25th July

Form GST ITC 04 Components

Form GST ITC 04 Components

Form GST ITC 04 is divided into 5 sections where Section 5 is divided further into 3 parts. Let us understand these sections in detail.

Basic Details of the Principal Manufacturer

  • Section 1 – GSTIN
  • Section 2(a) – Trade Name
  • Section 2(b) – Legal Name
  • Section 3 – Period for which the form is to be filed

These details are auto updated by the GSTN.

Details of inputs / capital goods sent for Job Work

  • Section 4 – Details of inputs or capital goods sent for job work (including those sent directly to job worker’s premises)

The following columns are required to be filled by the principal manufacturer

Column Heading

Description

GSTIN of Job Worker

To be filled where job worker is registered. To be left blank where job worker is unregistered

State

Mandatory in case of unregistered job worker

Job Worker Type

Whether job worker is located in SEZ or Non SEZ area

Challan Number

Mandatory Field.

Challan number issued to the job worker. Maximum limit 16 digits. Alpha numeric characters

Challan Date

Mandatory Field.

DD-MM-YYYY format

Goods Type

Mandatory Field.

Whether goods are inputs or capital goods

Description of Goods

Mandatory Field.

Alpha numeric, special characters allowed. Maximum length 70 digits

UQC

Mandatory Field.

Unit of measurement of goods sent

Quantity

Mandatory Field.

Quantity of goods sent to job worker. Maximum length 13 digits and 2 decimals

Taxable Value

Mandatory Field.

Total taxable value as mentioned in the challan. Maximum Length 13 digits and 2 decimals

Tax Rate

Mandatory Field.

Depends on place of supply. Interstate – IGST, Intra state- CGST and SGST

Cess

Cess amount to be filled if applicable. Maximum length 13 digits and 2 decimals

Details of Inputs/capital goods Received Back From the Job Worker

  • Section 5 - Details of inputs/capital goods received back from job worker or sent out from business place of job work
  • This section is divided into 3 parts –
  • Section 5A - Details of inputs/ capital goods received back from job worker to whom such goods were sent for job work; and losses and wastes

In this table, details of goods received back from the job worker are required to be mentioned.

Column Heading

Description

GSTIN of Job Worker

To be filled where job worker is registered. To be left blank where job worker is unregistered

State

Mandatory in case of unregistered job worker

Original Challan number issued by the Principal

Details of challan number on which goods were sent to the job worker. This may not  be filled if one to one correspondence is not available

Original Challan date issued by the Principal

Details of challan date on which goods were sent to the job worker. This may not be filled if one to one correspondence is not available.

DD-MM-YYY Format

Challan Number issued by Job Worker

Mandatory if fresh challan number issued by the job worker. Maximum limit 16 digits. Alpha numeric characters

Challan Date issued by Job Worker

Mandatory if fresh challan is issued by the job worker DD-MM-YYYY format.

Nature of Job Work Done

Mandatory Field.

Alpha numeric, special characters allowed. Maximum length 70 digits

Description of Goods

Mandatory Field.

Alpha numeric, special characters allowed. Maximum length 70 digits

UQC

Mandatory Field.

Unit of measurement of goods sent

Quantity

Mandatory Field.

Quantity of goods received from job worker. Maximum length 13 digits and 2 decimals

UQC (Losses and wastes)

Unit of measurement of goods lost or wasted during processing

Quantity

Quantity of goods lost or wasted. Maximum length 13 digits and 2 decimals

Section 5B - Details of inputs / capital goods received back from job worker other than the job worker to whom such goods were originally sent for job work

 This section is to be filled where goods sent to one job worker are received from another job worker. It means goods were sent from one job worker to another job worker for further processing.

Column Heading

Description

GSTIN of Job Worker

To be filled where job worker is registered. To be left blank where job worker is unregistered

State

Mandatory in case of unregistered job worker

Original Challan number issued by the Principal

Details of challan number on which goods were sent to the job worker. This may not  be filled if one to one correspondence is not available

Original Challan date issued by the Principal

Details of challan date on which goods were sent to the job worker. This may not be filled if one to one correspondence is not available.

DD-MM-YYY Format

Challan Number issued by Job Worker

Mandatory if fresh challan number issued by the job worker. Maximum limit 16 digits. Alpha numeric characters

Challan Date issued by Job Worker

Mandatory if fresh challan is issued by the job worker DD-MM-YYYY format.

Nature of Job Work Done

Mandatory Field.

Alpha numeric, special characters allowed. Maximum length 70 digits

Description of Goods

Mandatory Field.

Alpha numeric, special characters allowed. Maximum length 70 digits

UQC

Mandatory Field.

Unit of measurement of goods sent

Quantity

Mandatory Field.

Quantity of goods received from job worker. Maximum length 13 digits and 2 decimals

UQC (Losses and wastes)

Unit of measurement of goods lost or wasted during processing

Quantity

Quantity of goods lost or wasted. Maximum length 13 digits and 2 decimals

Section 5C - Details of inputs/ Capital goods sent to job worker and subsequently supplied from premises of job worker; and losses and wastes

Where goods sent to job worker premises for processing have been subsequently supplied or sold directly from job worker’s premises, the details of such transactions is to be reflected here.

Column Heading

Description

GSTIN of Job Worker

To be filled where job worker is registered. To be left blank where job worker is unregistered

State

Mandatory in case of unregistered job worker

Original Challan number issued by the Principal

Details of challan number on which goods were sent to the job worker. This may not  be filled if one to one correspondence is not available

Original Challan date issued by the Principal

Details of challan date on which goods were sent to the job worker. This may not be filled if one to one correspondence is not available.

DD-MM-YYY Format

Invoice Number issued by Principal

Mandatory.

Invoice number issued by principal for supply. Maximum limit 16 digits. Alpha numeric characters

Invoice Date issued by Principal

Mandatory.

DD-MM-YYYY format.

Nature of Job Work Done

Mandatory Field.

Alpha numeric, special characters allowed. Maximum length 70 digits

Description of Goods

Mandatory Field.

Alpha numeric, special characters allowed. Maximum length 70 digits

UQC

Mandatory Field.

Unit of measurement of goods sent

Quantity

Mandatory Field.

Quantity of goods received from job worker. Maximum length 13 digits and 2 decimals

UQC (Losses and wastes)

Unit of measurement of goods lost or wasted during processing

Quantity

Quantity of goods lost or wasted. Maximum length 13 digits and 2 decimals

Penalty for Late Filing

There is no penalty for late filing of Form GST ITC 04.


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