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GST ITC-04 Return: The Ultimate Guide to Filing Your Job Work Return

GST ITC-04 Return: Your Ultimate Guide to GST Job Work Return

If you’re a manufacturer or a supplier, you’re probably familiar with the Input Tax Credit (ITC) under the Goods and Services Tax (GST) regime. ITC is a credit that can be claimed by a registered GST taxpayer on the tax paid for goods or services purchased for business purposes. However, claiming ITC can be a tedious task, especially when it comes to filing ITC-04.

In this article, we’ll walk you through everything you need to know about the ITC-04 return, including its due date, applicability, and how to file ITC-04 online.

Understanding ITC-04

ITC-04 is a return that manufacturers and suppliers need to file to report the details of goods sent for job work. Job work refers to a process where a principal manufacturer sends raw materials or semi-finished goods to a job worker for further processing, testing, or repairs. The job worker returns the processed goods to the principal manufacturer, who then uses them in the manufacturing process.

At the 45th GST Meeting, Relaxation Was Provided for Filing the GST ITC-04.

As per the relaxation provided under rule 45(3) of the CGST Rules, the requirement of filing FORM GST ITC-04 has been modified as follows:

  • Taxpayers with an annual aggregate turnover of more than Rs.5 crores in the preceding financial year are required to furnish ITC-04 once in Six Months.
  • Taxpayers with an annual aggregate turnover of up to Rs.5 crores in the preceding financial year are required to furnish ITC-04 Annually.

Due Dates for Filling ITC-04 Return:

Since the ITC-04 is due according to turnover Half Yearly or Annually , it must be given on or before the 25th day of the month following the Half or Annual Period.

  • Taxpayers with an annual aggregate turnover of more than Rs.5 crores in the preceding financial year are required to furnish ITC-04 for period April to September, Due date is 25th October and For Period October to March, Due date is 25th April.
  • Taxpayers with an annual aggregate turnover of up to Rs.5 crores in the preceding financial year are required to furnish ITC-04 for the period April to March, Due date is 25th April.

Applicability of ITC-04

The GST ITC-04 form is applicable to all registered taxpayers who engage in job work. Job work is defined as any treatment or process undertaken by a person on goods belonging to another registered person.

Examples of Job Work Include:

  • A manufacturer sends raw materials to a job worker for further processing or assembly.
  • A printer sends paper to a job worker to print labels or stickers.
  • A jeweler sends gold or silver to a job worker to make jewelry.

The ITC-04 form must be filed by the principal manufacturer or supplier who has sent goods to the job worker and received the processed goods back. The form must be filed on a Half yearly or annual basis, even if there has been no job work activity during the relevant period.

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Exceptions for Filling ITC-04 Return:

ITC-04 is applicable to all registered GST taxpayers who send goods for job work. It applies to both inputs and capital goods sent for job work.

However, there are a few exceptions to this rule. ITC-04 is not required to be filed in the following cases:

  1. No Job Work During the Relevant Period: If a registered taxpayer has not sent any inputs or semi-finished goods for job work, or has not received any back during the relevant tax period, then they are not required to file the ITC-04 form.
  2. Job Work Exclusively for Personal Use: If a registered taxpayer sends inputs or semi-finished goods for job work, and the finished goods are intended solely for their personal use, then they are not required to file the ITC-04 form.
  3. Job Work Outside India: If a registered taxpayer sends inputs or semi-finished goods for job work outside India, then they are not required to file the ITC-04 form.

It is important to note that even if the taxpayer falls under one of these exceptions, they must maintain proper records of the job work done and the goods sent or received. This is because the tax authorities may ask for these records during a tax audit or investigation.

How to File ITC-04 Online:

Filing ITC-04 online is a simple and hassle-free process. Here are the steps involved:

  1. Login to the GST portal using your credentials.
  2. Navigate to the ‘Services’ tab and click on ‘Returns Dashboard.’
  3. Select the financial year and the relevant period for which you want to file the return.
  4. Click on ‘ITC Forms’ and select ‘ITC-04.’
  5. Fill in the required details, including the quantity and value of goods sent for job work, and the details of the job worker.
  6. Once you’ve filled in all the required details, click on ‘Preview’ to verify the information provided.
  7. If everything is in order, click on ‘Submit’ to file the return.
  8. After successfully filing the return, a success message will be displayed on the screen, and you’ll receive an acknowledgement in your registered email address.
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How to prepare ITC-04 Return?

Preparing and filing the GST ITC-04 return can be a complex process, but it is essential for claiming input tax credit (ITC) on goods sent for job work. The GST ITC-04 form needs to be filled by the registered taxpayers who have sent inputs or semi-finished goods for job work or have received the same back from the job worker. The form is used to claim Input Tax Credit (ITC) on the goods sent for job work. Here are the steps on how to fill the ITC-04 form:

  1. Access the GST Portal: You need to access the GST portal using your registered credentials.
  2. Select the Return: Once you have accessed the GST portal, you need to select the ITC-04 return from the list of available returns.
  3. Enter the Basic Details: In the first section of the form, you need to enter your GSTIN, financial year, and the relevant tax period for which you are filing the return.
  4. Enter the Details of Goods Sent for Job Work: In this section of the form, you need to enter the details of the goods sent for job work during the relevant tax period. This includes the description of goods, their HSN code, and the quantity sent.
  5. Enter the Details of Goods Received Back from Job Workers: In this section of the form, you need to enter the details of the goods received back from the job worker during the relevant tax period. This includes the description of goods, their HSN code, and the quantity received.
  6. Enter the Details of Inputs and Capital Goods Sent and Received: In this section of the form, you need to enter the details of inputs and capital goods sent for job work and received back from the job worker during the relevant tax period. This includes the description of goods, their HSN code, and the quantity sent and received.
  7. Reconcile the Data: Once you have filled in all the relevant details, you need to reconcile the data to ensure that it matches with the records maintained by you.
  8. Preview the Form: Before submitting the form, you need to preview it to ensure that all the details are filled in correctly.
  9. Submit the Form: Once you have verified and confirmed that all the details are correct, you can submit the ITC-04 form on the GST portal.

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Frequently Asked Questions:

What is Job Work?

Job work is a process where a principal manufacturer sends raw materials or semi-finished goods to a job worker for further processing, testing, or repairs. Let’s say, for example, a furniture manufacturer sends raw wood and fabric to a job worker to make chair cushions. The job worker will cut the fabric and sew it into cushions, and return the finished cushions to the furniture manufacturer, who can then use them to make chairs.

Another example could be a car manufacturer sending car parts to a job worker for painting or coating. The job worker will apply the paint or coating as per the manufacturer’s specifications and return the parts to the car manufacturer, who can then use them to assemble the finished car.

The job worker can be located within or outside the state, and the principal manufacturer can also send the goods to multiple job workers for further processing. However, both the principal manufacturer and the job worker need to be registered under GST for job work transactions to be eligible for Input Tax Credit (ITC). It is also essential to maintain proper records and follow the rules related to job work under the GST regime.

What is Input Tax Credit on Job Work?

Under the GST regime, a principal manufacturer can claim Input Tax Credit (ITC) on the tax paid for the raw materials or semi-finished goods sent for job work. This means that if the principal manufacturer pays GST on the goods sent for job work, they can claim a credit for that amount and adjust it against their output tax liability.

Let’s say, for example, a shoe manufacturer sends raw leather to a job worker for stitching and finishing. The shoe manufacturer pays GST on the raw leather, and the job worker charges GST for their services. When the finished shoes are returned to the shoe manufacturer, they can claim ITC for the GST paid on the raw leather and the GST paid to the job worker for their services.

However, certain conditions need to be met for the principal manufacturer to claim ITC on job work. The job worker needs to return the processed goods within the specified time limit, and the principal manufacturer needs to maintain proper records of the job work transactions. If these conditions are not met, the principal manufacturer may not be eligible to claim ITC.

It is crucial for principal manufacturers engaging in job work to understand the rules and regulations related to ITC on job work under the GST regime to avoid penalties or additional tax liabilities.

What is Time Limit to Receive Goods from Job Worker?

Under the GST regime, there is a time limit for principal manufacturers to receive processed goods from job workers. The time limit varies depending on the nature of the goods being processed and whether the job work is being done within or outside the state.

If the goods being processed are not notified under the GST Act, the principal manufacturer needs to receive the processed goods within one year from the date of sending the goods for job work. For example, if a textile manufacturer sends fabric for stitching to a job worker, they need to receive the finished products within one year from the date of sending the fabric.

If the goods being processed are notified under the GST Act, such as jewelry, the principal manufacturer needs to receive the processed goods within three years from the date of sending the goods for job work.

In case the job work is being done outside the state, the principal manufacturer needs to receive the processed goods within six months from the date of sending the goods for job work. For example, if an electronic goods manufacturer in Maharashtra sends goods for job work to a job worker in Gujarat, they need to receive the processed goods within six months from the date of sending the goods.

It is essential for principal manufacturers to comply with the time limit for receiving processed goods from job workers to avoid penalties or additional tax liabilities under the GST regime.

Can the Principal Directly Sell from The Job Worker’s Place?

Under the GST regime, a principal manufacturer can directly sell processed goods from the job worker’s place under certain conditions. These conditions are:

  1. The job worker is registered under GST.
  2. The job worker declares the place of business as his additional place of business in his GST registration.
  3. The principal manufacturer declares the job worker’s place of business as his additional place of business in his GST registration.

Let’s say, for example, a garment manufacturer sends raw fabric to a job worker for stitching. The job worker processes the fabric and returns the finished garments to the garment manufacturer. However, instead of transporting the finished garments to their place of business, the garment manufacturer can sell the garments directly from the job worker’s place of business, provided the above conditions are met.

This option of direct sale from the job worker’s place of business can be beneficial for principal manufacturers who may not have a sales outlet in the location where the job work is being done. However, it is important to ensure that all the necessary GST compliance requirements are met to avoid any penalties or additional tax liabilities.

It is also essential to note that the job worker’s place of business will be considered as an additional place of business for the principal manufacturer, and they will need to maintain proper records of all transactions done from that location.

What Records to Be Maintained by The Principal Manufacturer?

Under the GST regime, it is mandatory for a principal manufacturer to maintain proper records of all transactions related to job work. These records are essential for claiming input tax credit (ITC) on goods sent for job work and for filing GST returns. Some of the records that need to be maintained by the principal manufacturer are:

  1. Records of Goods Sent for Job Work: The principal manufacturer must maintain a record of all goods sent for job work, including the quantity, description, and value of the goods. This record should also include the GSTIN of the job worker to whom the goods are sent.
  2. Records of Goods Received Back from Job Worker: The principal manufacturer must maintain a record of all goods received back from the job worker after processing. This record should include the date of receipt, quantity, description, and value of the goods.
  3. Records of Itc Claimed: The principal manufacturer must maintain a record of all ITC claimed on goods sent for job work. This record should include the amount of ITC claimed and the corresponding GSTIN of the job worker.
  4. Stock Register: The principal manufacturer must maintain a stock register to record the stock of goods sent for job work, the stock of goods received back, and the stock of finished goods produced after processing.
  5. Job Work Register: The principal manufacturer must maintain a job work register to record all job work transactions, including the name and address of the job worker, the nature of job work, and the date of completion of job work.
  6. GST invoices: The principal manufacturer must maintain proper GST invoices for all transactions related to job work.

Proper maintenance of these records is essential for claiming ITC, filing GST returns, and avoiding any penalties under the GST regime. These records should be maintained for at least six years from the due date of filing of annual return.

Conclusion

Filing ITC-04 return online is a crucial compliance requirement for manufacturers and suppliers who send goods for job work. By following the steps outlined above, you can ensure a hassle-free and error-free filing experience.

Remember, the due date for filing ITC-04 is the 25th day of the month following the relevant period. Make sure you file the return on time to avoid any penalties or interest.

For more information on ITC-04 and other GST-related topics, visit “GST Portal.”

Disclaimer: Please note that all the information provided in this article is obtained from credible and authentic sources and has been carefully reviewed before publication. However, any discrepancies or errors in the information other than factual details should be considered a human error. Our blog aims to provide up-to-date information, and you are welcome to ask any questions related to the content. Moreover, please be advised that our responses are based solely on practical experience, and we suggest that you cross-verify with professional authorities to ensure factual accuracy.

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