Procedures to claim Input Tax Credit from Job worker under GST in India

 

ITC from a sub-contractor under GST


Procedures to claim Input Tax Credit from Job worker under GST in IndiaProvisions related Input Tax Credit under Job work

What are the provisions concerning taking of ITC in respect of inputs/capital goods sent to a job-worker?

According to GST Law, aspects relating to taking input tax credit in respect of inputs/capital goods sent for job-work have been specifically dealt in Section 16A, which provides that the credit of taxes paid on inputs or capital goods can be taken in the following manner:

Principal shall be entitled to take credit of inputs sent to a job-worker if the said inputs, after completion of job-work are received back in 180 days from the date of being sent out. In case the inputs are sent directly to the job-worker, the date shall be counted from the date of receipt of inputs by job-worker. Further an amount equivalent to the input tax credit availed on such inputs has to be paid along with interest, in case the inputs are not received back within the specified time.

The credit can be reclaimed when the inputs are actually received back.

The provisions relating to job-work are applicable only when registered taxable person intends to send taxable goods. In other words, these provisions are not applicable to exempted or non-taxable goods or when the sender is a person other than registered taxable person.

 

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