Indirect Tax Laws · Job Work

Job Work Procedure, Challan and Supply from Job Worker's Premises

Updated 5 October 2026 · Fact-checked

Under Section 143 of the CGST Act, a registered principal sends goods to a job worker under a delivery challan without paying tax. The goods must come back within one year (inputs) or three years (capital goods) of being sent out from the principal's place. The principal may supply from the job worker's premises if that place is declared as his additional place of business, if the job worker is registered, or if the goods are notified goods (Section 143(3)).

Understand Job Work Procedure, Challan and Supply from Job Worker's Premises

Job work means a process done by one person on goods owned by another registered person. The owner is the principal. The person who does the process is the job worker. Example: a garment maker (principal) sends cloth to a dyer (job worker) and gets it back dyed.

The law lets the principal send the goods out without paying GST, because no sale has taken place. The principal still owns the goods. In return, the law asks for control: a proper challan, a time limit for return, and reporting in a return. If the goods do not come back in time, the law treats the movement as a supply by the principal, deemed made on the day the goods were sent out.

The principal can also send the goods from one job worker to another. The time limit is counted from the date the goods were sent out from the principal's place. If the goods move between job workers, count from the original dispatch from the principal's place, not from each new transfer or from receipt by any job worker.

After the process, the principal has two choices. He can bring the goods back to his own place and supply from there. Or he can supply them directly from the job worker's premises. This second route is allowed in either of two cases: the job worker's place is declared as the principal's additional place of business, or the job worker is registered under Section 25.

There is also a separate, distinct route for notified goods. The principal may supply notified goods from the job worker's premises without the declaration and without the job worker being registered (Section 143(3)).

Responsibility stays with the principal. He must keep accounts of the goods sent and received, issue the challan, and report in FORM GST ITC-04. The job worker must keep records of the goods he receives and returns.

Also remember waste and scrap. If the job worker is registered, he can supply it from his own place of business. If he is not registered, the principal supplies it (Section 143(4)).

Key rules to remember

Time limit for return of inputs: Inputs: return within 1 year from the date of being sent out from the principal's place; If not returned in time, the inputs are deemed supplied by the principal on the day they were sent out. Tax and interest become payable. For transfers between job workers, count from the original dispatch from the principal's place.
Time limit for return of capital goods: Capital goods: return within 3 years from the date of being sent out from the principal's place; Moulds and dies, jigs and fixtures, and tools are outside the three-year limit under Section 143, so no return time limit applies to them. The one-year input limit does not apply to them either.
Delivery challan by principal: Challan issued by the principal under Rule 55 with the specified particulars; for transport, three copies (original, duplicate, triplicate); Particulars include number, date, consignor and consignee details, HSN, description, quantity, taxable value, tax details where applicable, place of supply for inter-state movement, and signature. For transport, the original goes with the consignee, the duplicate with the transporter, and the triplicate stays with the consignor.
Challan number series: Consecutive serial number, not more than 16 characters, in one or more series; Rule 55 asks for the same discipline as invoice numbering.
Supply from job worker's premises: Allowed if the job worker's place is declared as the principal's additional place of business, OR if the job worker is registered; The principal issues the invoice and pays tax on the supply. Notified goods are a separate route: the principal may supply them from the job worker's premises without the declaration or the job worker's registration (Section 143(3)). Export from the job worker's premises is also allowed.
ITC-04 reporting: Under Rule 45(3) as amended: quarterly if aggregate turnover exceeds ₹5 crore; half-yearly otherwise; due by the 25th of the month after the period; Reports goods sent to and received back from job workers during the period, including goods supplied directly from the job worker's premises. It does not report sales.
Waste and scrap: Registered job worker supplies it from his place of business; if he is unregistered, the principal supplies it (Section 143(4)); Where the job worker is unregistered, the supplier of the waste and scrap is the principal, not the job worker.

How to solve Job Work Procedure, Challan and Supply from Job Worker's Premises questions

Use this method for any job work case. It keeps your answer in provision-facts-conclusion form.

1Identify the principal and the job worker. Check that the principal is registered and that the goods are taxable goods belonging to him.
2Classify the goods sent: inputs, capital goods, or moulds, dies, jigs, fixtures and tools. This fixes the time limit: one year for inputs, three years for capital goods, and no return time limit for moulds, dies, jigs, fixtures and tools.
3Note the date of dispatch from the principal's place, the date the job worker received the goods, and the date goods returned or were supplied. Count the time limit from the date of dispatch. If the goods moved through several job workers, still count from the original dispatch from the principal's place.
4Check the challan: issued by the principal, correct contents, serial number, and number of copies. Check the e-way bill position if the case gives value and distance.
5Decide the route after processing: return to the principal, or supply directly from the job worker's premises. For the second route, check the declaration of additional place of business, or the job worker's own registration, or whether the goods are notified goods.
6If the time limit is missed, state the consequence: deemed supply on the day the goods were sent out, with tax and interest.
7Check reporting: ITC-04 for the correct period (quarterly if aggregate turnover exceeds ₹5 crore, half-yearly otherwise) and due date, and records kept by both parties.
8Write a one-line conclusion that answers the exact question asked.

Quickest way: Three-check shortcut: Goods, Clock, Route

When to use it: Use this in case-scenario MCQs and short written answers where you have under five minutes.

Goods: inputs (1 year), capital goods (3 years), or moulds, dies, jigs, fixtures and tools (outside the three-year limit, so no return deadline; the one-year input limit does not apply either).
Clock: count from the date the goods were sent out from the principal's place (original dispatch if goods are transferred between job workers). If the return or supply is later than the limit, it is a deemed supply on the day the goods were sent out.
Route: if the sale is made from the job worker's place, look for the additional place of business declaration, a registered job worker, or notified goods. If none applies, the supply from there is not covered by the job work route.
Reporting: ITC-04 by the 25th of the month after the period. It is quarterly if aggregate turnover exceeds ₹5 crore and half-yearly otherwise.

Common mistakes in Job Work Procedure, Challan and Supply from Job Worker's Premises

Counting the one-year or three-year period from the date the job worker received the goods.
Students think the clock starts when the job worker takes possession of the goods.
Fix: Count the period from the date the principal sent the goods out. If goods move between job workers, count from the original dispatch from the principal's place. The deemed supply date, if the limit is missed, is also the day of sending out.
Saying that tax must always be paid when goods are sent to a job worker.
Students confuse job work with a normal supply to another person.
Fix: Sending goods for job work is not a supply if the conditions are met. Tax arises only if the goods are not returned in time or the principal supplies them.
Writing that the job worker issues the invoice when goods are sold from his premises.
The goods are physically at the job worker's place.
Fix: The principal is the supplier. He issues the invoice and pays the tax, after declaring that place as his additional place of business, or because the job worker is registered, or because the goods are notified goods.
Applying the three-year limit to moulds, dies and tools, or the one-year limit to them.
Students remember only two time limits.
Fix: Moulds and dies, jigs and fixtures, and tools are outside the three-year limit under Section 143, so no return time limit applies to them. The one-year input limit does not apply either. State this exception in your answer.
Giving a wrong ITC-04 due date or reporting period.
Students mix ITC-04 with GSTR-3B or GSTR-1 dates, or assume it is always quarterly.
Fix: Remember it is a separate statement. It is filed quarterly if aggregate turnover exceeds ₹5 crore and half-yearly otherwise, and is due on the 25th of the month after the period.
Forgetting that the principal must account for the goods even if the job worker is unregistered.
Students assume registration of the job worker shifts responsibility.
Fix: The principal keeps the account of inputs and capital goods sent and received, issues the challan and files ITC-04. The job worker's registration only changes who can supply waste and scrap and how supply from his premises is handled.

Worked examples

Example 1

Asha Textiles (registered, Surat) sends grey fabric to Rangoli Dyers, an unregistered job worker in Surat, for dyeing. The fabric is not notified goods. After dyeing, Asha Textiles wants to sell the fabric to a buyer directly from Rangoli's premises. Can it do so, and who issues the invoice?

Show the solution

Provision: a registered principal can supply goods from the job worker's premises if the job worker's place is declared as the principal's additional place of business, or the job worker is registered. Notified goods have a separate route.
Facts: Rangoli Dyers is unregistered and the fabric is not notified goods. So only the declaration route is available.
Therefore Asha Textiles must declare Rangoli's premises as its additional place of business in its registration.
Once declared, the supply is made by Asha Textiles, the principal. Asha issues the tax invoice and pays the GST.
In ITC-04, Asha reports only the goods sent to and received back from the job worker, including goods supplied directly from the job worker's premises.

Answer: Yes. Asha Textiles can supply directly from Rangoli's premises after declaring that place as its additional place of business. Asha Textiles issues the invoice and pays the tax.

Example 2

A manufacturer with aggregate turnover above ₹5 crore, who therefore files ITC-04 quarterly, sends inputs to a job worker on 18 August 2026 under a challan. The job worker receives them on 20 August 2026. The processed goods are returned on 12 November 2026. By when must the manufacturer report each movement in ITC-04? What happens if the inputs were never returned?

Show the solution

Provision: under Rule 45(3) as amended, a taxpayer with aggregate turnover above ₹5 crore files ITC-04 quarterly, by the 25th of the month after the quarter. A taxpayer with lower turnover files half-yearly.
Dispatch on 18 August 2026 falls in the July to September 2026 quarter. Due date: 25 October 2026.
Return on 12 November 2026 falls in the October to December 2026 quarter. Due date: 25 January 2027.
The one-year period runs from the dispatch from the principal's place on 18 August 2026, not from the job worker's receipt on 20 August 2026. The return on 12 November 2026 is well within one year, so the inputs came back in time.
If the inputs were never returned (or supplied) within one year of dispatch on 18 August 2026, they are deemed supplied by the principal on the day they were sent out, 18 August 2026. Tax and interest are payable by the principal.

Answer: Report the dispatch in ITC-04 by 25 October 2026 and the receipt back by 25 January 2027. If the inputs were not returned within one year of dispatch on 18 August 2026, the principal is deemed to have supplied them on 18 August 2026 and must pay tax with interest.

Exam tips

Case MCQs often hide the dates. Compute the gap between the job worker's receipt and the return before choosing an option.
In written answers, name the three controls: challan, time limit, ITC-04. Examiners look for all three.
When a question says goods are sold from the job worker's premises, check for the declaration of additional place of business, the job worker's registration, or notified goods before concluding.
Keep the exceptions ready: moulds, dies, jigs, fixtures and tools, and waste and scrap. They are favourite one-mark traps.
Compare 'send for job work' with 'supply to job worker' for a tax-treatment question: first is not a supply if conditions are met, second is a normal taxable supply.

Practice questions from Job Work

Job Work Procedure, Challan and Supply from Job Worker's Premises in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Job Work Procedure, Challan and Supply from Job Worker's Premises: frequently asked questions

Can a job worker supply goods directly from his premises?

The principal makes the supply from the job worker's premises. This is allowed if the principal declares that place as his additional place of business, or if the job worker is registered. Notified goods have a separate route. The job worker himself can supply only waste and scrap generated during job work, if he is registered.

What is the due date for ITC-04?

Under Rule 45(3) as amended, ITC-04 is filed quarterly if aggregate turnover exceeds ₹5 crore, and half-yearly otherwise. It is due by the 25th of the month after the period. It reports goods sent to and received back from job workers, including goods supplied directly from the job worker's premises.

What is the difference between sending goods to a job worker and a direct supply from the job worker's premises?

Sending goods for job work is a movement of the principal's own goods and is not a supply if the conditions are met. A direct supply is a sale to a customer, so the principal must issue a tax invoice and pay GST. The goods do not need to come back to the principal first.

What happens if goods are not returned within one or three years?

The period is counted from the date the goods were sent out from the principal's place. If the goods are not returned or supplied in time, they are deemed supplied by the principal on the day they were sent out. The principal must pay tax and interest on them. Moulds and dies, jigs and fixtures, and tools are outside the three-year limit, so no return time limit applies to them, and the one-year input limit does not apply to them either.

Who must issue the delivery challan for job work?

The principal issues the challan when he sends goods to the job worker. It is issued under Rule 55 with the specified particulars, such as number, date, party details, HSN, quantity and value, and tax details where applicable. For transport, it is issued in three copies.