GST · Job work
A practical guide for manufacturers who send material to job workers: what ITC-04 asks for, where most mistakes come from, and how an ERP prepares it from the challans you already record.
The basics
When a manufacturer sends inputs or capital goods to a job worker – for plating, painting, machining, fabrication or any other process – without paying tax on the movement, GST asks the principal to report those movements in Form ITC-04. It shows what went out (Table 4), what came back (Table 5A) and what is still with the job worker.
Under the current rules it is filed half-yearly by businesses with aggregate turnover above ₹5 crore and yearly by others. If inputs are not returned within one year, or capital goods within three years, the despatch is treated as a deemed supply on the date it was sent.
This guide explains how ERP records support ITC-04. Confirm due dates and tax treatment for your business with your CA.
Goods sent to job workers: challan no. and date, job worker GSTIN and state, description, HSN, UQC, quantity, taxable value and tax rate.
Goods received back from job workers: original challan, job worker’s challan no. and date, nature of job work, quantity received and losses.
Inputs pending over 1 year, capital goods over 3 years.
Where it goes wrong
Outward and inward challans are matched by hand at the end of the period.
Receipts are booked without the job worker’s challan number, which Table 5A needs.
A coil goes out and comes back as sheets, or a bracket comes back painted – hard to match by hand.
Years-old pending challans sit in the books and push items towards deemed supply.
ITC-04 from Tejaxo ERP
Each operation with its process, charge item, rate unit (kg or pieces), rate, SAC and GST – carried to the gate pass, receipt and ITC-04.
Only quality-passed stock goes out; receipts can never exceed what is pending on the gate pass.
The job worker’s challan number and date are captured on receipt – ready for Table 5A.
Same item back, item to another item, coil to sheets with coil-wise tracking, or many-to-many by weight pool.
Process loss and scrap written off in a separate, reversible document with a reason and remark – never by editing old documents.
ITC-04 Table 4, Table 5A and deemed-supply (1 / 3 year) reports from the same records.
Missing job-worker challan numbers, items pending over six months and knock-offs pending, on one screen.
A one-time knock-off proposal to close old pending gate passes, with an audit trail.
Checklist
FAQ
ITC-04 is the GST form in which a manufacturer (the principal) reports goods sent to job workers and goods received back from them, so that input tax credit on those goods stays valid.
Under the current rules, half-yearly for businesses with aggregate turnover above ₹5 crore and yearly for others. Confirm the due dates for your case with your CA.
Table 4 lists goods sent to job workers (challan number and date, job worker GSTIN, description, HSN, quantity, taxable value and tax rate). Table 5A lists goods received back from job workers against the original challans, including losses.
If inputs are not returned within one year, or capital goods within three years, of being sent, the despatch is treated as a supply on the date it was sent and GST becomes payable.
Yes, if every outward and inward job-work movement is recorded against a challan. Tejaxo ERP prepares the Table 4, Table 5A and deemed-supply reports from its returnable gate pass records.
Record the job worker’s challan number on every receipt, watch items pending close to six months and one year, and close old pending challans with a documented knock-off instead of editing old documents.
Book a free consultation. We look at how your job work runs today and show the Table 4, Table 5A and deemed-supply reports on your own data.
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