Issues in Job-Work and E-Way Bill

Arjun (Fictional Character): Krishna, E-Way is now been fully implemented on inter as well as intra state transportation of goods, Taxpayers are aware of generation of E-Way  bill on Normal Sale and Purchase transactions but still they have a confusion regarding generation of E-Way bill on other transactions.

Krishna (Fictional Character):Arjuna, Correctly said.  Apart from normal sale and purchase transactions there are other transactions such as free samples, Job-Work, Supply to unknown recipient etc which take place in normal course of business. Hence provisions of E-Way bill must be known to taxpayers else they will land in trouble.

Arjun:Krishna,Is E-Way bill required for Goods sent on Job-Work?

Krishna:Arjuna, E-Way bill is required to be generated by any person who causes movement of goods of consignment value exceeding Rs 50,000-

1. In relation to supply
2. Reasons other than supply
3. Due to inward supply from unregistered person.

Reason other than supply includes job work hence E-Way bill will be required to be generated on the basis of Delivery Challan given by the principle to the job-worker and vice versa.

Arjun:Krishna,E-way bill is not required if consignment value is less than Rs 50000 does this apply for job work also?

Krishna:Arjuna there are two cases for goods sent on job work basis-

1. Inter state

If goods are sent from one state to another state e-way bill has to be generated by principal irrespective of value of consignment

Example - A of Aurangabad send goods for job work to B of Indore and the value of consignment is Rupees 10,000 e-waybill has to be generated by A compulsorily.

2. Intra state

If goods are sent on job work from one place to another place in the same state, e-waybill has to be generated only if value of goods is above Rs 50000 irrespective of the distance travelled

For example-Ifgoods are sent toNashik from Aurangabad of consignment value rupees 20,000 the E-Way bill is not to be generated as the value of the consignment does not exceed Rs 50000.

Arjun:Krishna how will the principal generate e waybill?

Krishna:Arjuna, for generating e waybill the principal

1. Must login on the E-Way Bill portal with his username and password
2. Click on generate new e-way bill
3. Select transaction type as job work
4. Select document type as delivery challan, provide date of challan
5. Mention GSTNof the job worker in the BILL TO Section, if the job worker is unregistered then mention as URP (unregistered person)
6. Provide value of goods, Description of product, HSN code, Tax amount, Rate Based on delivery challan.

After that Part-B must be filled.

Arjuna:Krishna what value should be provided while generating e way bill in case of goods sent on job work?

Krishna:Arjuna, e waybill is generated on the basis of delivery challan; the value mentioned in delivery challan must be mentioned in Part A of E way bill

For example A (Principle) sends goods of value Rs 200000 to B(job worker), then A should prepare a delivery challan and generate e-way bill on the basis of delivery challan and The value entered will be Rs 2 lakh

Now, When B(job worker) sends the goods back to a principal he issues Invoice ofRs 50000 as job work charges, in this case E-Way bill must be generated of Value Rs 2,00,000 only.

How to determine the value of rs.200000 is a big question in itself for this one needs to refer Valuation Rules.

Arjuna:Krishna, what will happen if goods are transported directly from job worker’s premises to the customer?

Krishna:Arjuna two cases might arise here-

1. Job worker is unregistered-

If goods are directly sent from job workers premises to the customer and job worker is unregistered then e-way bill must be generated by the principal

2. If job worker is registered

If goods are directly sent from job worker premises to customer and Job worker is registered in GST then the job worker must generate e way bill by collecting invoice from the principal.

Arjun: Krishna, How will the department keep an eye on the goods sent on job-work and received back ?

Krishna: Arjuna, A person sending goods on job-work basis has to file Return ITC-04 on quarterly basis. Here delivery challan wise details of goods sent on Job worker and received back needs to be given.

For Ex- A (Principle) sends 100 TV sets to B(Job Worker) and receives back only 80 TV sets from Job worker B, 15 sets were sent to another Job worker and 5 sets were directly sold from job worker’s premises. Then while filing ITC-04 –the in details of goods sent to job worker (100 sets) and Goods received from Job worker (80 sets), goods sent to another  job worker (15 sets) as well as goods supplied by job worker (5sets) all such details would be required to be given. Hence Goods sent out and Received back would be matched.

Arjuna:Krishna, what lesson must be learnt by the taxpayer?

Krishna: Arjuna, Various taxpayers send their goods for job-work. Government will now be able to track movement of goods sent on job work through E-Way bill. If goods are transported without E-Way bill and if caught by the tax officer, goods may be confiscated/seized and penalty shall be levied. Everyone should check the generation of E-Way bill and follow the Law.