Job work
This query is : Resolved
17 August 2017
Can we transfer raw material from Job worker to Principal on Delivery challan without payment of duty which we received in Excise regime ??
17 August 2017
If job worker is not registered than you can; if job worker is a registered person than he should make a tax invoice for his job work charges and send the goods.
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26 August 2017
Sir,
I'M Principal I sent Raw & Packing to Job Worker in excise regime availed credit but now this Raw & packing required to me at principal then how I treat. For finished goods your statement is correct.
I'M Principal I sent Raw & Packing to Job Worker in excise regime availed credit but now this Raw & packing required to me at principal then how I treat. For finished goods your statement is correct.
02 August 2024
In the GST regime, the transfer of raw materials from a job worker back to the principal is handled differently compared to the excise regime. Since you are dealing with raw materials that were sent to the job worker under the excise regime, here's how you should handle their return to the principal under GST:
### **1. **Returning Raw Materials from Job Worker to Principal**
**a. **Transfer under GST Regime:**
1. **Delivery Challan for Raw Materials:**
- If raw materials (including packing materials) are being sent back from the job worker to the principal, you need to issue a **Delivery Challan**. This document should include details like the GSTIN of the job worker and principal, the description of goods, quantity, and value.
2. **No GST on Raw Materials Transfer:**
- Typically, the transfer of raw materials back from the job worker to the principal is not subject to GST if the raw materials were originally sent to the job worker under a **Job Work Agreement** and the principal is receiving the raw materials back without any additional processing.
3. **Maintain Proper Documentation:**
- Keep detailed records of the Delivery Challan, including the original challans issued when sending raw materials to the job worker, and ensure that all documentation is consistent.
**b. **Excise Duty Considerations:**
- Under the GST regime, the treatment of excise duty from the pre-GST era generally doesn’t affect current transactions. However, if there were any excise duty implications in the previous regime, they should be reviewed and handled according to the transition rules.
### **2. **GST Transition and Credit Adjustments**
**a. **Credit of Excise Duty:**
- If you had availed excise duty credit on raw materials sent to the job worker under the excise regime, ensure that this credit was properly accounted for in your records. Generally, under GST, such transitional credits were to be claimed and adjusted according to the transitional provisions provided in the GST law.
**b. **Transitional Provisions:**
- Review the transitional provisions applicable to the transition from excise to GST. Ensure that any credits or adjustments are properly reflected in your GST filings.
### **3. **Handling Finished Goods**
**a. **Returning Finished Goods:**
- When finished goods are returned from the job worker to the principal, GST is applicable on the job work charges. The principal should issue a Delivery Challan and include GST on job work charges if the job worker is registered.
**b. **Input Tax Credit:**
- The principal can claim Input Tax Credit (ITC) on the GST paid on job work charges, subject to compliance with GST rules.
### **Summary:**
- **Raw Materials Transfer:** Use a Delivery Challan for the return of raw materials from the job worker to the principal. This transfer is generally not subject to GST if it is a direct return without any additional processing.
- **Excise Duty:** Ensure that any transitional credits from the excise regime are properly accounted for under GST.
- **Finished Goods:** GST will be applicable on job work charges for finished goods returned from the job worker to the principal.
Always ensure compliance with the GST Act and consult with a GST expert for specific issues related to your business and historical transactions.
### **1. **Returning Raw Materials from Job Worker to Principal**
**a. **Transfer under GST Regime:**
1. **Delivery Challan for Raw Materials:**
- If raw materials (including packing materials) are being sent back from the job worker to the principal, you need to issue a **Delivery Challan**. This document should include details like the GSTIN of the job worker and principal, the description of goods, quantity, and value.
2. **No GST on Raw Materials Transfer:**
- Typically, the transfer of raw materials back from the job worker to the principal is not subject to GST if the raw materials were originally sent to the job worker under a **Job Work Agreement** and the principal is receiving the raw materials back without any additional processing.
3. **Maintain Proper Documentation:**
- Keep detailed records of the Delivery Challan, including the original challans issued when sending raw materials to the job worker, and ensure that all documentation is consistent.
**b. **Excise Duty Considerations:**
- Under the GST regime, the treatment of excise duty from the pre-GST era generally doesn’t affect current transactions. However, if there were any excise duty implications in the previous regime, they should be reviewed and handled according to the transition rules.
### **2. **GST Transition and Credit Adjustments**
**a. **Credit of Excise Duty:**
- If you had availed excise duty credit on raw materials sent to the job worker under the excise regime, ensure that this credit was properly accounted for in your records. Generally, under GST, such transitional credits were to be claimed and adjusted according to the transitional provisions provided in the GST law.
**b. **Transitional Provisions:**
- Review the transitional provisions applicable to the transition from excise to GST. Ensure that any credits or adjustments are properly reflected in your GST filings.
### **3. **Handling Finished Goods**
**a. **Returning Finished Goods:**
- When finished goods are returned from the job worker to the principal, GST is applicable on the job work charges. The principal should issue a Delivery Challan and include GST on job work charges if the job worker is registered.
**b. **Input Tax Credit:**
- The principal can claim Input Tax Credit (ITC) on the GST paid on job work charges, subject to compliance with GST rules.
### **Summary:**
- **Raw Materials Transfer:** Use a Delivery Challan for the return of raw materials from the job worker to the principal. This transfer is generally not subject to GST if it is a direct return without any additional processing.
- **Excise Duty:** Ensure that any transitional credits from the excise regime are properly accounted for under GST.
- **Finished Goods:** GST will be applicable on job work charges for finished goods returned from the job worker to the principal.
Always ensure compliance with the GST Act and consult with a GST expert for specific issues related to your business and historical transactions.
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