Job Work Under GST: Challans, Timelines and ITC-04
Akash Kore
· Founder & Product Architect· 3 min read
Job work is a supply of services by the processor and a non-supply movement by the principal. That asymmetry is what makes it efficient — and what makes the timelines unforgiving, because an overrun converts a movement you never taxed into a supply you should have.
- ✓Goods sent for job work move on a delivery challan, not an invoice.
- ✓Inputs must return within one year, capital goods within three.
- ✓Overrunning the limit deems the dispatch a supply from the date it was sent.
- ✓Form ITC-04 reports the movement, half-yearly or annually depending on turnover.
The mechanics
Under Section 143, a registered principal may send inputs or capital goods to a job worker without payment of tax, under intimation and subject to conditions. The goods move on a delivery challan under Rule 55, in triplicate, carrying the description, quantity, taxable value and HSN.
The job worker charges GST on their processing charges only, not on the value of the goods, and the principal claims that credit in the normal way.
The timelines
Inputs must be returned or supplied directly from the job worker's premises within one year. Capital goods have three years. Moulds, dies, jigs, fixtures and tools are excluded from the limits entirely.
If the goods do not come back in time, Section 143(3) deems the original dispatch to be a supply on the day the goods were sent out. Tax becomes payable from that earlier date, with interest running from then — not from the day the limit expired.
Supplying directly from the job worker
The principal may supply finished goods directly from the job worker's premises, provided the job worker is registered, or the principal has declared the job worker's premises as an additional place of business.
That declaration is a simple amendment to the registration and avoids an unnecessary return journey for goods that are already where the customer wants them.
Form ITC-04
The movement is reported in Form ITC-04: half-yearly for principals with aggregate turnover above five crore rupees, and annually for those at or below it.
The return reconciles goods sent, goods received back, and goods supplied directly from the job worker's premises. Gaps in that reconciliation are what reveal an overrun, so the return is effectively the enforcement mechanism for the timelines.
Frequently asked questions
### Do I charge GST when sending goods for job work?
No. The movement is made under a delivery challan without payment of tax, provided the conditions in Section 143 are met. The job worker charges GST on their processing charges, which you claim as input credit.
### What happens if goods are not returned in time?
The original dispatch is deemed to be a supply on the day the goods were sent out — not on the day the limit expired. Tax becomes payable with interest from that earlier date, which is why the timelines need monitoring rather than reconstruction.
### What is the time limit for job work?
One year for inputs and three years for capital goods, from the date of dispatch. Moulds, dies, jigs, fixtures and tools sent to a job worker are outside the time limits altogether.
### Who files ITC-04?
The principal, not the job worker. Filing is half-yearly where aggregate turnover exceeds five crore rupees and annually otherwise. It reconciles goods sent, returned and supplied directly from the job worker's premises.
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Frequently Asked Questions
Do I charge GST when sending goods for job work?
No. The movement is made under a delivery challan without payment of tax, provided the conditions in Section 143 are met. The job worker charges GST on their processing charges, which you claim as input credit.
What happens if goods are not returned in time?
The original dispatch is deemed to be a supply on the day the goods were sent out — not on the day the limit expired. Tax becomes payable with interest from that earlier date, which is why the timelines need monitoring rather than reconstruction.
What is the time limit for job work?
One year for inputs and three years for capital goods, from the date of dispatch. Moulds, dies, jigs, fixtures and tools sent to a job worker are outside the time limits altogether.
Who files ITC-04?
The principal, not the job worker. Filing is half-yearly where aggregate turnover exceeds five crore rupees and annually otherwise. It reconciles goods sent, returned and supplied directly from the job worker's premises.
Akash Kore
Founder & Product ArchitectArchitecting business document operating systems and automated billing workflows for Indian SMBs, agencies, and enterprises.