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2020 ] SUPPLIES TO JOB WORKER IS EXEMPTED BUT SUPPLY OF SERVICES BY JOB WORKER J85
CGST/SGST Act, 2017. The value of services would be determined in
terms of Section 15 of the CGST/SGST Act and would include not only
the service charges but also the value of any goods or services used by
him for supplying the job work services, if recovered from the principal.
The waste and scrap generated during the job work may be supplied by
the registered job worker directly from his place of business as per Sec-
tion 143(5) of CGST/SGST Act. Detailed instructions in this regard was
already issued by C.B.I. & C. vide Circular No. 38/12/2018, dated 26-3-
2018 [2018 (11) G.S.T.L. C3].
Ruling :
(i) The rate of GST applicable is 18% as per Sl. No. 26(iv) - Manufactur-
ing services on physical inputs (goods) owned by others, other than
(i), (ia), (ii), (iia) and (iii) above of Notification No. 11/2017-C.T.
(Rate), dated 28-6-2017.
(ii) As per Section 143 of the CGST/SGST Act, 2017; the registered prin-
cipal may, without payment of tax, send inputs or capital goods to a
job worker for job work and, if required, from there subsequently to
another job worker and so on. Subsequently, on completion of the
job work, the principal shall either bring back the goods to his place
of business or supply the same directly from the place of busi-
ness/premises of the job worker within one year in case of inputs or
within three years in case of capital goods. The rate of GST applica-
ble is the same as that mentioned supra.
(iii) As per the provisions of Section 143(1) of the CGST Act, 2017 the
principal can supply goods directly from the place of busi-
ness/premises of the job worker to its end customer. The supply of
goods by the principal from the place of business/premises of the
job worker to the end customer will be regarded as supply by the
principal and not by the job worker. If the job worker is not regis-
tered then the principal shall declare the place of business of the job
worker as his additional place of business.
As per Rule 45 of the CGST/SGST Rules, 2017; the inputs, semi-
finished goods or capital goods shall be sent to the job worker and
received back by the principal under the cover of a delivery challan
containing particulars as prescribed in Rule 55 ibid issued by the
principal, including where such goods are sent directly to a job
worker. The principal is required to file FORM GST ITC-04 every
quarter furnishing the details of the goods sent for job work.
(iv) The job worker, in addition to the goods received from the princi-
pal, can use his own goods, for providing the services of job work.
The job worker, as a supplier of services, is liable to pay GST at the
applicable rate. The job worker shall issue an invoice at the time of
supply of the services as determined in terms of Section 13 read
with Section 31 of the CGST/SGST Act. The value of services would
be determined in terms of Section 15 of the CGST/SGST Act and
would include not only the service charges but also the value of any
goods or services used by him for supplying the job work services.
The use of own goods by the job worker in addition to the goods
supplied by the principal for job work will not change the nature of
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