Whether goods sent by a taxable GST person to a job worker be treated as supply and will they be liable to Pay GST?
No, the goods sent by a GST registered person to a job worker is not a supply, as there is no transfer of title and no consideration for the goods is involved. In terms of section 143 of the Central Goods and Service Tax Act a registered taxable person (the principal), after following the prescribed procedure, may send any inputs or capital goods, without payment of tax, to a job worker for job work and the principal shall either
- Bring back such GST inputs or capital goods after completion of job work or otherwise within the prescribed period i.e. 1 year in case of GST inputs and 3 years in case of capital goods, or
- Supply such ( ITC ) inputs or capital goods, within such prescribed period, on payment of tax within India, or with or without payment of GST for export, as the case may be.
If the goods or, capital goods, as the case may be, are not returned to the principal within the specified above time, the same shall be deemed to have been supplied by the principal to the job worker on the date the goods were sent out to the job worker and the principal shall be required to pay GST accordingly on such supplies.