Central Board of Excise and Customs (CBEC) has issued Circular No.38/12/2018 dated 26th March 2018 and has clarified various issues related to Job Work-
Key Highlights of the Circular are:
- Scope/ambit of job work:
It has been clarified that job worker is expected to work on the goods sent by the principal and whether the activity is covered within the scope of job work or not would have to be determined on the basis of facts and circumstances of each case.. It is also clarified that the job worker, in addition to the goods received from the principal, can use his own goods for providing the services of job work.
- Requirement of registration for the job worker:
It has been clarified that a 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 in the same State or in different States.
- Supply of goods by the principal from the job worker’s place of business / premises
It has been clarified that the 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
- Availability of input tax credit to the principal and the job worker.
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 further details please refer the attached circular.
Source : Central Board of Excise and Customs