Page 29 - GSTL_23rd April 2020_Vol 35_Part 4

2020 ] JOB WORK IN “GST” AND “WORK” IN “INCOME TAX” J57

JOB WORK IN “GST” AND “WORK” IN
“INCOME TAX”
By
R. Prakash
GANPAT RAM & ASSOCIATES

In Pre-GST (Goods and Services Tax Act, in short
GST) era, job work activity was exempted from the Indi-
rect taxes but in the GST era, it has been brought into the
net of indirect taxation.
This article focuses on the difference in the con-
cept of ‘job work’, in the GST Act from the Income-tax Act.
“JOB WORK”
1. Job work is defined under Section 2(68) of Goods and Services Tax
Act, 2017 as
“any treatment or process undertaken by a person on goods belonging to an-
other registered person and the expression “job worker” shall be construed
accordingly”;
2. This definition explains job work as a job of treatment or process
done by a person, job worker, of goods belonging to another registered person.
Job worker, thus, can receive goods from any registered person without
any specific restrictions for the receipt of goods.
Job work can be undertaken with the material provided by the parent
manufacturer or from other supplier of goods to perform the process of job work.
3. In this regard, there are no specific conditions provided in the Goods
and Services Tax Act not to undertake the process with the materials received
apart from original manufacturer.
Generally, Registered persons can take credit of input tax paid on any
supply of goods or services or both which are used in the course or furtherance
of business as per Section 16(1) of Goods and Services Tax Act, 2017. The relevant
section is reproduced below :
“16. (1) Every registered person shall, subject to such conditions and re-
strictions as may be prescribed and in the manner specified in section 49, be
entitled to take credit of input tax charged on any supply of goods or services
or both to him which are used or intended to be used in the course or further-
ance of his business and the said amount shall be credited to the electronic
credit ledger of such person.”
4. Goods and Services Tax Act allows assessee’s to take credit for the
job work activity also.
Even the credit is allowed for the direct delivery of goods at the job
worker’s place for job work purpose, without coming into the parent manufac-
turer. This is provided in Section 19(2) of Goods and Services Tax Act, 2017.
“WORK”
5. As per the Income-tax Act, 1961 “WORK” is defined under Clause iv,
Explanation to Section 194C.
GST LAW TIMES  23rd April 2020  149