Job work Circular No. 38/12/2018

Brief of CBEC Clarification on issues related to Job work Circular No. 38/12/2018

  • On completion of the job work (by the last job worker), the principal shall either bring back the goods to his place of business or supply (including export) the same directly from the place of business/premises of the job worker within one year in case of inputs or within three years in case of capital goods (except moulds and dies, jigs and fixtures or tools).
  • The responsibility of keeping proper accounts of the inputs and capital goods sent for job work lies with the principal.
  • The responsibility for sending the goods for job work as well as bringing them back or supplying them has been cast on the principal.
  • The job worker, in addition to the goods received from the principal, can use his own goods for providing the services of job work.
  • Job worker is required to obtain registration only in cases where his aggregate turnover, to be computed on all India basis, in a financial year exceeds the threshold limit regardless of whether the principal and the job worker are located in the same State or in different States.
  • Supply of goods by the principal from the place of business / premises of the job worker will be regarded as supply by the principal and not by the job worker as specified in section 143(1)(a) of the CGST Act.
  • E-way bill shall be generated either by the principal or by the registered job worker irrespective of the value of the consignment, where goods are sent by a principal located in one State/Union territory to a job worker located in any other State/ Union territory.
  • Inputs, semi-finished goods or capital goods being sent for job work (including that being sent from one job worker to another job worker for further job work or those being sent directly to a job worker) shall be sent under the cover of a challan issued by the principal, containing the details specified in rule 55 of the CGST Rules. This rule has been amended vide notification No. 14/2018-Central tax dated 23.03.2018 to provide that a job worker may endorse the challan issued by the principal.
  • The principal is also required to file FORM GST ITC-04 every quarter
  • The job worker, as a supplier of services, is liable to pay GST if he is liable to be registered. He shall issue an invoice at the time of supply of the services.
  • The value of moulds and dies, jigs and fixtures or tools may not be included in the value of job work services provided its value has been factored in the price for the supply of such services by the job worker. It may be noted that if the job worker is not registered, GST would be payable by the principal on reverse charge basis in terms of the provisions contained in section 9(4) of the CGST Act. However, the said provision has been kept in abeyance for the time being.
  • Section 143 of the CGST Act provides that the principal may supply, from the place of business /premises of a job worker, inputs after completion of job work or otherwise or capital goods (other than moulds and dies, jigs and fixtures or tools) within one year or three years respectively of their being sent out, on payment of tax within India, or with or without payment of tax for exports, as the case may be. This facility is available to the principal only if he declares the job worker’s place of business / premises as his additional place of business or if the job worker is registered.
  • In view of the provisions contained in clause (b) of sub-section (2) of section 16 of the CGST Act, the input tax credit would be available to the principal, irrespective of the fact whether the inputs or capital goods are received by the principal and then sent to the job worker for processing, etc. or whether they are directly received at the job worker’s place of business/premises, without being brought to the premises of the principal. It is also clarified that the job worker is also eligible to avail ITC on inputs, etc. used by him in supplying the job work services if he is registered.

For detailed study refer Circular No 38/12/2018
Disclaimer: This article is for general information purpose only and not an advise. The author do not assume and hereby disclaim any liability to any party for any loss, damage, or disruption caused by errors or omissions, if any.


  • Vikrant Bansal


    Thankyou for the details. I have a question regarding generation of EWaybill while moving goods back from job workers place to principal. What would be the valuation of goods in EWaybill- would it be goods value or job workers service charges or both.

    Kindly clarify.


    • Pankaj Kataria

      Dear Mr. Vikrant,

      The value of goods in E-way bill should be a sum of the value of goods and the value addition done by the job worker i.e. job workers service charge.

      Please feel free to contact, in case you need any further clarifications.

      Team PKA Consultants

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