Section 143 of CGST Act, 2017 : Section 143: Job Work Procedure

Explanation using Example

Imagine a company, 'TechFab Pvt Ltd.', which manufactures electronic gadgets. The company is registered under GST and decides to send some electronic components to 'Precision Works', a job worker, for specialized assembly. 'TechFab Pvt Ltd.' intimates the GST authorities about this arrangement as required.

'Precision Works' completes the job work and sends the assembled components to another job worker, 'FineFinish Services', for additional work. Throughout this process, no GST is paid on the transfer of components as they are not being supplied, but are sent for job work.

Once 'FineFinish Services' completes its job work, 'TechFab Pvt Ltd.' has the following options:

• Bring back the assembled components to their premises without paying GST within one year for inputs or three years for capital goods.
• Decide to supply the assembled components from 'FineFinish Services' directly to customers. In this case, GST must be paid at the time of supply if it's within India, or it can be with or without payment of GST if the components are exported. This is permissible only if 'FineFinish Services' is a registered job worker or if 'TechFab Pvt Ltd.' declares 'FineFinish Services' as an additional place of business, unless exempted by the Commissioner.

If 'TechFab Pvt Ltd.' does not receive the components back or does not supply them from the job worker's place within the specified timeframes, it will be considered that 'TechFab Pvt Ltd.' has supplied the components to the job worker on the day they were originally sent out, and GST would be payable on this deemed supply.

'TechFab Pvt Ltd.' is responsible for maintaining proper accounts for the inputs or capital goods sent for job work.

If any waste or scrap is generated during the job work, 'Precision Works' can supply it directly from their place of business on payment of GST, provided they are registered. If they are not registered, 'TechFab Pvt Ltd.' can supply the waste or scrap and pay the required GST.