Job work in revised Model GST Law

Section 20 of chapter V and section 55 of chapter XIII of revised model GST draft  covers the provisions of job work. The term itself is defined in section 2(61) of revised Model GST draft law.

Section 2(61) defines a job work as “job work” means undertaking any treatment or process by a person on goods belonging to another registered taxable person and the expression “job worker” shall be construed accordingly” 

Section 55 of revised draft of Model GST law provide for removal of inputs or capital goods without payment of tax for job work. 

1. A registered taxable person can send inputs or capital goods. He is required to receive them back into his premises or he can supply them from the place of job worker on payment of tax.To supply these goods from the place of job worker it is necessary that the principal has declared the place of job worker as his additional place of business.But in case of notified goods or when the job worker is registered, the principal can make supply from his place even if he has not declared the place of job worker as his additional place of business. Let us sum up the entire provisions in following table

2. Goods sent	Option 1	Option 2
   Inputs sent for job work	Return within one year	Supply from the place of job worker within one year on payment of tax
   Capital Goods sent for job work	Return within three years	Supply from the place of job worker within three years on payment of tax
   Moulds and dies, jigs and fixtures, or tools	No restriction of return	No restriction for return

3. Supply of goods from the place of job worker: A principal is allowed to make supply from the place of job worker but two conditions are there
   • He will have to pay tax on supply if it is within India (for export supply he may or may not pay the tax)
   • He will have to declare the place of job worker as his additional place of business
4. He can remove the goods even if the place of job worker is not declared as additional place of business
   • Job worker is registered under the GST.
   • If the goods are notified by commissioner in this respect.
5. Any waste or scrap generated in job work process may also be supplied by the job worker directly from his place on payment of taxes. 
6. In case any inputs or capital goods are not received back by principal or supplied from the place of job worker in the specified time period of one year or three year. It shall be deemed that those goods were supplied by the principal to the job worker on the date when they were removed.

These were the provisions for removal of inputs or capital goods for job work. In next article we will discuss the provisions of ITC for goods sent for job work.