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Job work under GST in plain English: the challan, the 1-year and 3-year limits, e-way bills, ITC-04 due dates for FY 2026-27 and a register format.
Job work under GST lets a registered manufacturer send inputs or capital goods to a job worker, for plating, coating, heat treatment or machining, without paying tax on them. In return, the law asks four things of you. The goods leave on a challan. Inputs come back within one year and capital goods within three. You keep proper accounts of what sits with each vendor. And you report every challan, out and back, in Form GST ITC-04.
For FY 2026-27, ITC-04 is half-yearly if your aggregate turnover in the previous year was above ₹5 crore, and the first return is due on 25 October 2026. Everyone else files once for the year, by 25 April 2027.
In many plants the reality looks different. Material leaves on a handwritten challan book. Nobody can say quickly what sits at which vendor, or what came back short. The one-year limit passes without anyone noticing, and ITC-04 is rebuilt from Excel a few days before it is due. This guide sets out the rules, works through an example and gives you a register format that keeps all of it in one place.
The CGST Act defines job work as any treatment or process done by a person on goods that belong to another registered person. You, the owner of the goods, are the principal. The plating shop, heat treater or machinist is the job worker.
Section 143 of the CGST Act sets out the job work procedure:
You keep the input tax credit on what you send. Section 19 allows the credit on inputs and capital goods sent for job work, even when your supplier delivers them straight to the job worker.
| Goods sent | Must come back, or be sold from the job worker's premises, within | Possible extension |
|---|---|---|
| Inputs, including part-processed goods | 1 year | Up to 1 more year, if the Commissioner allows it on sufficient cause |
| Capital goods | 3 years | Up to 2 more years, on the same basis |
| Moulds and dies, jigs and fixtures, tools | No time limit | Not needed |
The clock starts on the day the goods leave you. If your supplier delivers inputs or capital goods straight to the job worker, it starts on the day the job worker receives them.
If the goods are not back in time, the law treats them as supplied to the job worker on the day they were sent out. Rule 45 then requires you to show that supply in GSTR-1 and pay the tax with interest. This is the cost of a forgotten challan, and it is why a register with a "pending at vendor" column matters.
Rule 45 says goods must travel to the job worker under a challan issued by you, even when they go straight from your supplier. The challan must carry the details listed in rule 55. That rule names transport of goods for job work as one of the cases where a delivery challan can be issued instead of an invoice.
| Field on the challan | What rule 55 says |
|---|---|
| Challan number and date | Serially numbered, up to 16 characters, in one or more series |
| Your name, address and GSTIN | Required |
| Job worker's name, address and GSTIN | GSTIN if the job worker is registered |
| HSN code and description of goods | Required |
| Quantity | Required |
| Taxable value | Required |
| Place of supply | For movement between states |
| Signature | Required |
Rule 55 lays out three copies for a challan used in a supply: the original for the consignee, a duplicate for the transporter and a triplicate for you. Using the same three copies for job work is a sensible habit.
Three more fields are worth adding, although the rule does not ask for them:
When goods move from one job worker to another, or come back to you, the job worker can endorse your challan with the quantity and description. Goods sent on from one job worker to another can also travel on a challan issued by that job worker.
Yes, in many cases. Rule 55 says goods moving on a delivery challan must be declared under rule 138, the e-way bill rule.
| Movement | E-way bill needed? |
|---|---|
| To a job worker in another state | Yes, whatever the value. You or the job worker, if registered, can raise it |
| To a job worker in your own state | When the consignment value is above ₹50,000 |
| Back to you from a registered job worker | When the consignment value is above ₹50,000 |
The consignment value is the value on the challan, including any tax shown on it. For movement inside your own state, also check your state's e-way bill rules.
Two portal limits apply from 1 January 2025, as announced by GSTN:
The first limit matters for job work. Material often sits at a vendor for months. If it comes back on your original challan and that challan is more than 180 days old, the portal will not raise an e-way bill against it. Plan for a fresh challan from the job worker instead.
Form GST ITC-04 is a declaration filed by the principal. It lists the goods you sent to job workers and the goods you received back. You file it on the GST portal under Services, Returns, ITC Forms. It has four tables:
| Table | What goes in it |
|---|---|
| 4 | Inputs and capital goods sent for job work, including goods sent straight to the job worker |
| 5A | Goods received back from the job worker you sent them to, with losses and wastes |
| 5B | Goods received back from a different job worker, with losses and wastes |
| 5C | Goods sold from the job worker's premises, with losses and wastes |
Table 5A can carry your original challan or a fresh challan issued by the job worker. If you have more than 500 challans to report, the portal points you to its offline upload. The job worker does not file ITC-04. It is the principal's job.
How often you file depends on your aggregate turnover in the previous financial year, FY 2025-26.
| Your aggregate turnover in FY 2025-26 | Period covered | ITC-04 due by |
|---|---|---|
| Above ₹5 crore | April to September 2026 | 25 October 2026 |
| Above ₹5 crore | October 2026 to March 2027 | 25 April 2027 |
| ₹5 crore or less | April 2026 to March 2027 | 25 April 2027 |
The Commissioner can extend these dates by notification, so check the GST portal before the due date. Do not plan on an extension.
Many guides that still rank on Google say ITC-04 is quarterly. That changed on 1 October 2021, when Notification 35/2021-Central Tax replaced "quarter" in rule 45 with a six-month period for businesses above ₹5 crore and the financial year for everyone else. The GST portal's own ITC-04 manual says the same.
The job worker's charge is a service under heading 9988, "manufacturing services on physical inputs owned by others". Notification 15/2025-Central Tax (Rate) replaced this entry with effect from 22 September 2025.
| Job work on | GST rate |
|---|---|
| Diamonds (Chapter 71) | 1.5% |
| Listed goods: food products (Chapters 1 to 22), Chapter 23 products other than dog and cat food, pharmaceutical products (Chapter 30), hides, skins and leather (Chapter 41, not leather goods or footwear), textiles (Chapters 50 to 63), printing of newspapers, books and journals, printing of other Chapter 48 and 49 goods taxed at 5% or nil, bricks taxed at 5%, Chapter 71 products other than diamonds, handicraft goods and umbrellas | 5% |
| Making alcoholic liquor for human consumption | 18% |
| All other job work | 18% |
The rates shown are IGST. Within a state, the same total is split equally between CGST and SGST. Plating, coating, heat treatment and machining of metal parts are not in the list, so they fall in "all other job work" at 18%. Check the date on any guide that quotes a different rate.
You make steel brackets. Your aggregate turnover in FY 2025-26 was above ₹5 crore. On 4 May 2026 you send 500 brackets for zinc plating to a registered vendor in your own state, valued at ₹60 each.
| Date | What happens | Paperwork | ITC-04 |
|---|---|---|---|
| 4 May 2026 | 500 brackets go out | Your challan JW-0042, value ₹30,000. That is not above ₹50,000 and the vendor is in your state, so rule 138 does not require an e-way bill. A vendor in another state would need one whatever the value | Table 4: 500 pieces on JW-0042 |
| 20 June 2026 | 492 come back on the vendor's challan. Inspection passes 480 and rejects 12 for peeling | Vendor's challan, quoting JW-0042 | Table 5A: 492 received back against JW-0042 |
| 20 June 2026 | 8 brackets are missing | Ask the vendor in writing | Nothing yet |
| 25 October 2026 | The April to September 2026 return is due | Both entries above |
Here is what happens to each group:
If your turnover had been ₹5 crore or less, the same entries would go into one ITC-04 for the whole year, due on 25 April 2027.
The law does not prescribe a register format. It only says the accounts are your responsibility. This layout follows the main columns ITC-04 asks for, so the return can be read straight off the register. Keep one row per challan line.
| Challan no. and date | Job worker and GSTIN | Item and HSN | Process | Type | Qty sent | Value (₹) | Received (date, vendor challan) | Good | Rejected | Loss or waste | Pending at vendor | Legal limit |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| JW-0042, 4 May 2026 | Plating vendor, their GSTIN | Bracket, your HSN | Zinc plating | Input | 500 | 30,000 | 20 Jun 2026, vendor challan no. | 480 | 12 | 0 | 8 | 1 year |
| JW-0057, 25 Jun 2026 | Plating vendor, their GSTIN | Bracket, your HSN | Re-plating | Input | 12 | 720 | Not yet | 12 | 1 year |
A few habits make the register work:
ERPNext can hold the whole flow: the challan, the stock at each vendor, the receipt and the ITC-04 data. What follows is checked against ERPNext 16 and the India Compliance app.
Material sent sits in the job worker warehouse until a receipt books the finished goods back. If you keep one warehouse per job worker, the stock balance shows what each one holds, and anything short stays visible there. If your business is the job worker, ERPNext 16 also has a Subcontracting Inward Order for material your customers send you.
India Compliance is the app that handles GST, e-invoicing and e-way bills in current ERPNext.
The export fills tables 4 and 5A only. Goods passed between job workers, goods sold from a job worker's premises, and losses and wastes still need completing on the portal before you file.
Every item on a Subcontracting Order must be a stock item marked as subcontracted, with its own BOM. A bracket that goes out for plating and then for powder coating needs a "bracket, plated" item and a "bracket, plated and coated" item, each with its own BOM, plus a service item for each process. Every lot then goes through a purchase order and a Subcontracting Order. Across a few dozen products with two or three outside steps each, the item list grows quickly, and stores have to pick the right code every time. Our guide to ERPNext for manufacturing explains how subcontracting fits with BOMs and work orders.
For manufacturers we work with, we built a simpler vendor job-work card and register as a custom Frappe app that sits beside standard ERPNext:
If your challans live on paper and your accounts in Tally, the first step is getting both into one system. Our Tally to ERPNext migration guide covers that move.
We set up ERPNext for manufacturers across India, including job work. That can mean standard subcontracting with India Compliance e-way bills and the ITC-04 export, or a custom job-work card and register where native subcontracting would mean too many item codes. We start by following your challans, vendors and returns as they run today, then show you which route fits. See our ERPNext service, or tell us how your job work runs today.
Half-yearly or yearly, not quarterly. Since 1 October 2021 it is half-yearly if your aggregate turnover in the previous financial year was above ₹5 crore, due on 25 October and 25 April. Otherwise it is yearly, due on 25 April after the financial year ends.
Yes, if you send goods for job work. You file it once a year. For FY 2026-27 it is due on 25 April 2027.
The daily late fee in section 47 of the CGST Act covers the statements and returns filed under sections 37, 39, 44, 45 and 52. ITC-04 is filed under rule 45, so it is not on that list. A breach of the rules with no specific penalty can attract the general penalty in section 125, of up to ₹25,000. The bigger risk is the goods themselves: inputs not back within a year are treated as supplied, with tax and interest to pay.
No. Under section 143 you send inputs and capital goods to a job worker without paying tax, under a challan. The job worker's charge for the work is taxable, at 18% for most engineering job work.
When the consignment value on the challan is above ₹50,000, yes. Also check your state's e-way bill rules for movement inside the state. If the job worker is in another state, you need an e-way bill whatever the value.
A registered job worker can sell the waste and scrap directly from their premises, paying the tax. If the job worker is not registered, you, the principal, sell it.
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