Exporters often outsource manufacturing to job workers. The GST regime provides special provisions for exporters, including zero-rating and ITC refunds. However, job work arrangements must comply with the procedural requirements of Section 143.
This article explains the compliance requirements for exporters using job work.
Zero-Rating and ITC
Exporters can export without payment of IGST by filing a Letter of Undertaking. They can also claim ITC on inputs and job work charges.
Job Work Procedure
- The exporter (principal) must issue a delivery challan when sending inputs to the job worker.
- The goods must be returned within the prescribed time limit (1 year for inputs).
- The exporter must file ITC-04.
ITC on Job Work Charges
The exporter can claim ITC on GST paid to the job worker for job work services. This ITC can be utilised against output tax liability or claimed as a refund.
Refund of ITC
Exporters typically end up in an ITC-refund position. The refund can be claimed through Form GST RFD-01.
Compliance Checklist
- File LUT annually.
- Maintain delivery challans for all movements.
- File ITC-04 on time.
- Track time limits for return of goods.
- Claim refund of unutilised ITC.
Conclusion
Job work for exporters requires compliance with both the job work procedure and export provisions. Proper documentation and timely filing are essential.
At Anuj Desai & Associates, we provide expert advisory services on GST for exporters using job work. Our team can help you comply with all requirements.
For a confidential consultation, contact us at office@anujdesaiassociates.com or call 9619456656. Visit our website at https://anujdesaiassociates.com or connect with our founder on LinkedIn at linkedin.com/in/ca-anuj-desai-122547230.