What are the Tax treatments under the GST Act in the below mentioned case…….
Mr.X = (Principal-Registered Person)
Mr.Y = (Job Worker-Unregistered Person)
Mr.Z=( Job Worker-Unregistered Person)
Mr. X has Purchase Gold Bar and sends it to Mr. Y for making Ornaments from Gold Bar (i.e. Job Work), Further Mr. Y sends it to Mr. Z for another job work purpose. After completing the job work process Mr. Z sends Gold Ornaments to Mr. X.
As per section 143 of the CGST Act 2017, the prnical can esnd inputs to job worker wiht out payment of GST. the job worker has to return the goods after processing wiht in one year from the date of receipt. thus in the above case, the inputs can be removed from job work from Mr X to Mr Y wiht out payment of GST. The material can also be moved to another job worker with out payment of tax.Thus it can be moved to Z also by Y with out payment of GST. the only condition is that Z should return the goods to X wiht in one year from thedate of receipt of the goods. X should show all such movement in his GSTR1 retiurn.
Thank you very much for your reply. I agree with you, but there is some doubts in my mind that.... in the above case is the Mr. X is liable to charge GST on Job Work done by Mr.Y under the Reverse Charge Mechanism?
yes it is for the service charges on the job work, Y cannot raise a tax invoice as he is ain unregistred person. Y is supplying job work servcie to X and on his service charges X has to pay GST by raising an Invoice and pay tax on reverse charge. he can take input tax credit on such payment after making such payment.
What is the rate of GST on Job Work under this act?
there is no specific category of services called job work. it is the nature of servcies provided on the goods tht has ben classified based on which the tax rate has been fixed
there is no specific category of services called job work. it is the nature of servcies provided on the goods tht has ben classified based on which the tax rate has been fixed
Heading 9988 (Manufacturing services on physical inputs (goods) owned by others) tax rate CGST 2.5% and SGST 2.5% total GST is 5 %
in this case Mr.X is liable to Charge GST on job work done by Mr.Y under the Reverse Charge Mechanism it is ok, but is the Mr.Y is liable to Charge GST on job work done by Mr.Z?
Iif Y has send the material to Z on the order of X, then X has to pay reverse charge on the job work charges of Y also If z is the job worker of Y, Y is not required to pay reverse charge on the job work charges of Z as he himself is not a registered person. Any how the job work charges of Z also would have been included in the consilidated job work charges of Y when he raises his invloice. When X pays reverse charge tax on the same it includes th tax payable on the job work charges of Z even. Thus there is no loss ofrevenue to government as well in this case.
ok now my all queries related to job work is over.
Thank you very much for your prompt reply.
you are welocme. I too come to know about practical situations when i answersuch questions. learning platform for both
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