Hello, in this post we are going track down some information about E-way bill for job work and present it for you.
We will cover the following topics:
What is Job work?
Job work is an integral part of the manufacturing industry. The manufacture will outsource some of its manufacturing activities to increase their production. It will include initial processing, further processing, packing, assembling or other processes to complete the product.
Job work is when a person does a specific process on the semi-finished goods or any kind of raw materials. The principal manufacturer can either own or provide these raw materials. The work process is carried out by the job worker as per the manufacturer’s instructions.
E-way bill for job work
E-Way bill is an electronic document that traces the movement of goods from the supplier to the recipient. However, for the movement of goods for job work, the e-way bill is generated by every registered person. Even if is not for the supply of goods, a registered person should generate e-way bill if the value of goods exceeds the threshold limit ie, Rs. 50, 000.
The E-way bill is generally made for the movement of goods for job work and there are 2 types of movement:
- Intra-state movement of goods
- Inter-state movement of goods
Intra-state movement of goods – If the movement of goods happens within the same state, then the e-waybill is generated only if the value of goods is above Rs 50,000 irrespective of the distance travelled.
Inter-state movement of goods – The e-way bill is generated either by the manufacturer or by the registered job worker for the inter-state movement of goods irrespective of the value of the goods transported.
Documents to be issued
E way bill is produced based on delivery challan (DC). E way bill is a simple and standardized process. It will help to avoid filling each state’s declaration forms, waybills, and permits beyond their state which would usually cause unnecessary friction in the process.
A delivery challan needs to contain the following details:
- Delivery challan’s date and number.
- Name, address, and GSTIN of both the consignor and consignee.
- HSN code
- Description of the goods
- Quantity of goods
- The taxable value of the goods
- Tax rate as well as the tax amount (CGST, SGST, IGST, UTGST separately)
- Place of supply and the signature.
The details of the challan filed through Form GST ITC – 04 and is then submitted by the 25th day of the month succeeding the quarter. You can also view the challan details in Form GSTR-1.
For instance: Kuldeep (Principal) sends goods worth Rs. 3,00,000 to Raj (job worker), then Kuldeep prepares the delivery challan and generate the e-way bill based on this DC. So, the value entered both in delivery challan and the e-way bill will be Rs 3,00,000.
Scenarios you may face when processing an E-way bill for job work are:
- Manufacturer issue the input to the job worker.
- Inputs collected back by the manufacturer from the job worker.
- Job worker’s direct supply of finished goods to the customer.
- Vendor directly delivers the input to the job worker.
Manufacturer issue the input to the job worker
When the principal/manufacturer and the job worker is located in 2 different states, then the principal generates the e-way bill for the job worker. The e-way bill is generated even if the value of the goods is less than Rs. 50,000.
The inputs collected back by the manufacturer from the job worker
When the principal/manufacturer receives input back from job worker, they can accept the finished goods or ask the job worker to directly supply to the customer.
If the job worker is registered on E- way portal, they can generate their e-way bill. If the job worker is not registered, then the manufacturer will generate the e-way bill for the job worker.
Job worker’s direct supply of finished goods to the customer
When a job worker supply finished goods from his business place to the customer:
- The job worker needs to be registered under section 25 or
- Declare the job worker’s place as an additional place of business by the principal.
Finally, a consignor can claim an ITC on half-finished products or raw materials for job work. It is possible even if the goods are sent to the job worker directly from the vendor’s place. The inputs are then returned to the consignor within 1 year or else the ITC will get inverted.
Let us see a practical application for GST E-way bill for job work in our everyday life.
B of Karnataka sends goods worth Rs. 20,000 for job work to C Jaipur. As a result, B generates an e-way bill because the cities are situated in two different states. The above rule of goods exceeding over Rs. 50,000 is not applicable here because it is inter-state transportation.
But if the transport of goods/services worth Rs. 40,000 is within a single state, like from Dharwad to Bengaluru then the supplier need not generate an e-way bill to the customer as the value of goods is below Rs. 50,000.
With that, we have come to an end of this post on the e-way bill for job work.