Time limit for return of goods sent for job work under GST

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What Is Job Work under GST?

Job work under GST refers to any treatment or process undertaken by a person (the job worker) on goods belonging to another registered person (the principal). Throughout this process, the principal retains ownership of the goods, and sending them out without payment of tax is permitted, provided the principal gives intimation (via Form ITC-04) and adheres to prescribed conditions

Standard Time Limits for Return of Goods

Inputs: Goods classified as inputs must be returned to the principal within one year of being sent out for job work (A Complete Guide On Job Work Under GST India .
Capital Goods: Items falling under capital goods have a longer window of three years for return.
Direct Sends: If inputs are sent directly to the job worker (i.e., not via the principal’s premises), the one-year clock starts on the date of receipt by the job worker.
Rationale: These limits balance flexibility for manufacturers with safeguards against misuse, ensuring input tax credits flow correctly.

Consequences of Non-Compliance

If goods aren’t returned within the stipulated period, they’re deemed to have been supplied by the principal to the job worker on the day they were sent out. As a result, the principal becomes liable for GST on that deemed supply—with interest—starting from that effective date.

Extensions of Time Limit

Commissioner’s Power: A proviso inserted by the CGST (Amendment) Act, 2018 allows the Commissioner to grant extensions on showing “sufficient cause” . This means:

Inputs: Up to one additional year, making a total of two years (Job work under GST).
Capital Goods: Up to two additional years, making a total of five years (Job work under GST).

Transitional Provisions: For goods removed for job work before GST’s rollout on July 1, 2017, the transitional rule gave a six-month window (until December 31, 2017), extendable by two months .

COVID-19 Relief: While the CBIC issued broad GST compliance relief (e.g., via Notifications 51/2020 and 52/2020 and related circulars), there were no specific extensions to the job work return deadlines under these measures .

Latest Updates: Notifications & Circulars

Notification 2/2019-CT (Jan 29, 2019): Brought the CGST Amendment Act, 2018’s extension provisions into force from February 1, 2019 .
Notification 35/2021-CT (Sept 24, 2021): Revised the frequency of filing FORM ITC-04—half-yearly for taxpayers with annual turnover over ₹5 crore, due October 25 and April 25 respectively.
Circular 38/12/2018-CT (Mar 26, 2018): Clarified that opting into the job work scheme and its procedural benefits is purely optional for the principal, Whether mere activity of sending goods by principal to job worker without opting for the procedure laid down in section 143 can be treated as supply; Without such activity falling within the scope of supply under section 7 of CGST Act, 2017, whether principal can be asked to send the goods against payment of tax in absence of any deeming provision in section 143 to treat the activity of sending the goods as deemed supply.
Circular 126/45/2019-GST (Nov 22, 2019): Standardized the GST rate on “job work services” at 12%, resolving overlaps with earlier 18% entries (Circular No. 126/45/2019-GST).

Practical Advice for Principals and Job Workers

Prepare Delivery Challans: Always issue a detailed challan under Rule 45 when sending goods for job work.
File Form ITC-04 on Time: Upload quarterly details of all job work challans by the 25th of the month following each quarter(now Half year); apply early for extensions if you need more time.
Disclose in GSTR-1: Under “Document Issued” (Table 9), list all delivery challans to maintain transparency and avoid mismatches.
Use E-Way Bills: For interstate movements, generate e-way bills under Rule 138 to avoid penalties and transit delays.
Leverage GST Portal Reminders: Set calendar alerts for return deadlines and monitor the portal’s notification inbox to stay ahead.
Keep Digital Records: Scan and archive all documents (invoices, challans, extension orders) to simplify audits and digital cross-checks.

Conclusion

Staying on top of the time limits for returning goods sent on job work is important for seamless input tax credit flow and penalty avoidance. Remember the one-year (inputs) and three-year (capital goods) standard windows, the Commissioner’s extension powers, and the need for timely FORM ITC-04 filings. Keep your documentation tight, leverage CBIC updates, and you’ll navigate the job work provisions under GST with confidence and curb any compliance headaches.

Time limit for return of goods sent for job work under GST