Job work under GST: Section 143, ITC-04 and the time limits
The direct answer
Under Section 143 of the CGST Act, a registered principal can send inputs or capital goods to a job worker without paying GST. The goods must come back to the principal, or be supplied from the job worker's premises, within one year for inputs and three years for capital goods. If they do not, the goods are treated as supplied by the principal on the day they were sent out, and tax with interest becomes payable. The principal (not the job worker) reports every challan in Form GST ITC-04: half-yearly if the previous year's aggregate turnover was above ₹5 crore, yearly if it was ₹5 crore or less.
What counts as job work
Section 2(68) defines job work as any treatment or process undertaken by a person on goods belonging to another registered person. The owner is the principal. The one doing the work is the job worker.
A plain example: a pump maker sends raw castings to a machining shop, which machines them and sends them back. The castings belong to the pump maker throughout. If the shop buys its own castings and sells you machined parts, that is an ordinary sale.
Per the CBIC circular on job work (38/12/2018), only a registered person can use Section 143, and using it is the principal's choice. The job worker may add some of their own material to the work.
What moves, and on which document
The principal sends the goods under a challan (Rule 45). The challan carries the details in Rule 55: date and serial number, consignor and consignee name, address and GSTIN, HSN code and description, quantity, taxable value, place of supply for a movement between states, and signature.
The circular asks for three copies. Two travel with the goods, and the job worker returns one with the finished goods.
Other movements:
- Job worker to another job worker: the challan may come from the principal or from the sending job worker, or the principal's challan may be endorsed with the quantity and description.
- Returned in lots: the original challan cannot be endorsed. The job worker issues a fresh challan for each lot.
- Supplier ships straight to the job worker: the supplier invoices the principal and names the job worker as consignee. The principal then issues the challan to the job worker.
E-way bill. Rule 138 requires one when the consignment value is above ₹50,000, even if the movement is not a sale. A job work movement between two states needs one whatever the value, generated by the principal or by the job worker if registered. If the job worker is unregistered, the principal generates it.
How the clock runs
The clock starts on the day the goods leave, challan by challan. It is one year for inputs (including intermediate goods made during the process) and three years for capital goods. Moulds and dies, jigs and fixtures, and tools have no return deadline.
On sufficient cause, the Commissioner can extend the period by up to one more year for inputs and two more years for capital goods.
If goods do not come back in time. The goods are deemed supplied by the principal to the job worker on the day they were sent out. Rule 45(4) says the supply is declared in GSTR-1 and the principal pays the tax with interest. Per the circular, it is invoiced in the return for the month the limit ran out, dated as of dispatch. Goods that come back after the limit are treated as a supply by the job worker to the principal.
Supplying from the job worker's premises. This counts as the principal's supply, and the principal invoices the customer. The job worker's premises must be declared as the principal's additional place of business, unless the job worker is registered.
What ITC-04 contains
ITC-04 is the statement of goods sent to, and received back from, job workers. The circular says it also serves as the intimation Section 143 asks for. In the GST portal it has these tables:
- Table 4: goods sent for job work (challan number and date, item details, job worker's GSTIN or state).
- Table 5A: goods received back from the same job worker, with losses and wastes.
- Table 5B: the same, from a different job worker.
- Table 5C: goods supplied from the job worker's premises. Their invoices go in the principal's GSTR-1.
Who files and when. The principal files it. Rule 45(3), as changed from 1 October 2021, uses the previous financial year's aggregate turnover:
- Above ₹5 crore: two periods a year, April to September and October to March.
- ₹5 crore or less: one period, the financial year.
The statement is due on the 25th of the month after the period, unless the Commissioner extends the date by notification. That is 25 October for April to September, and 25 April for October to March or for the whole year. For April to September 2026, the date was 25 October 2026. If you have not filed, check the GST portal for any extension and ask your accountant about late fees, which this article did not check.
The job worker's side
- Registration. A job worker needs it only if all-India aggregate turnover is above the threshold: ₹20 lakh, or ₹10 lakh in most special category states, as the circular states it. Check the current limit.
- GST on the service. The job worker charges GST on the job work service. The value includes goods or services the job worker used and recovered from you. Your moulds, dies and tools need not be added if their value is already in the price.
- Rates. Notification 15/2025-Central Tax (Rate) rewrote the job work entry from 22 September 2025. Central tax is 9% for job work in general (18% in all with state tax), and 2.5% (5% in all) for listed goods such as food, medicines, leather hides, textiles and handicrafts, and for tailoring. Diamond job work is 0.75% central tax. The rate depends on the goods, so confirm the classification of each job.
- Input credit. The principal can claim credit on inputs whether they reach the principal first or go straight to the job worker. A registered job worker can claim it on inputs used for the service.
Scrap and waste
Waste and scrap made during job work can be sold by the job worker from their own premises on payment of tax if registered, or by the principal if the job worker is not registered (Section 143(5)). Record it against the challan. ITC-04 tables 5A to 5C carry losses and wastes, so a gap between quantity sent and returned needs an entry.
A worked example
A made-up case, with GST assumed at 18%.
A pump maker with ₹3 crore turnover last year sends 1,000 castings, worth ₹2,40,000, to a registered machining shop on challan JW/014 on 12 June 2026. The shop charges ₹30 a piece. That is ₹30,000 plus 18% GST of ₹5,400, so ₹35,400 on its invoice.
600 pieces come back on 20 July and 380 on 5 August, each lot on a fresh challan from the shop. The other 20 were rejected in machining and are recorded as loss or scrap against JW/014.
With turnover under ₹5 crore, the pump maker files one ITC-04 for 2026-27, due 25 April 2027. It lists JW/014 in Table 4 and the two return challans in Table 5A.
Now suppose 100 castings (₹24,000) never came back. The one-year limit runs out in June 2027, so that month's return shows a deemed supply with an invoice. Tax at the assumed 18% is ₹4,320, dated 12 June 2026, with interest for the time until payment.
Common mistakes
- Sending goods without a challan, or with one missing the Rule 55 details.
- Reusing the original challan for goods returning in lots.
- Forgetting the e-way bill on a movement between states, however small the value.
- Tracking deadlines by month instead of by challan date.
- Leaving a quantity difference unexplained, with no scrap or loss recorded.
- Using this year's turnover to decide ITC-04 frequency. The test is the previous financial year.
- Supplying from an unregistered job worker's premises without declaring it as an additional place of business.
What lamp can and cannot do here
lamp can show which challans are still open and how long each lot has been with a job worker, using the records you connect. It can prepare reminders, such as a message to a job worker about a lot nearing its limit, and sends them only after you approve. lamp does not file ITC-04 and does not give tax advice. Have your accountant confirm the filing and any treatment you are unsure about.
What to do this week
List every challan not yet fully returned, with its date and its one-year or three-year deadline. Chase the oldest first, and check the next ITC-04 against that list before it is filed.
Research sources
All checked on 26 October 2026. Rule and Act texts are consolidated copies and the Act text is the one amended up to 30 September 2020, so check for later amendments.
- CBIC Circular 38/12/2018-GST on job work, 26 March 2018. Source for challans, ITC, direct supply, deemed supply and registration.
- CGST Act, 2017 as updated to 30 September 2020, Sections 2(68) and 143.
- CGST Rules, 2017 as at 26 December 2022 (CBIC tax information site), Rules 45, 55 and 138.
- Notification 35/2021-Central Tax, 24 September 2021, which made ITC-04 half-yearly or yearly from 1 October 2021.
- GST portal tutorial: Form GST ITC-04.
- E-way bill system FAQ.
- Notification 15/2025-Central Tax (Rate), 17 September 2025. This is a copy hosted by IIT Hyderabad, not a CBIC site, so confirm the rates against the official notification.