Job work is processing on someone else's goods. The principal sends inputs; the job worker processes them and returns them, charging for the work. Indian manufacturing clusters run on it: grey cloth to a dyeing house in Surat, brass rod to a turner in Jamnagar, castings to a machine shop in Rajkot, yarn to a knitter in Tiruppur.
GST rules (section 143 of the CGST Act, as of October 2026)
- Goods go to the job worker on a delivery challan, without GST, with an e-way bill where needed.
- Inputs must come back within one year, and capital goods such as moulds and dies within three years. If not, the sending is treated as a supply on the day it left.
- The job worker charges GST on the job charge, under its own SAC code.
- The principal files ITC-04, half-yearly if aggregate turnover is above ₹5 crore and yearly otherwise.
What makes it hard
- Material goes out by weight and comes back by count, with process loss in between.
- Dozens of job workers each hold some of your stock.
- Lots get split, merged or sent on to a second job worker.
- Challans pile up past the one-year limit unnoticed.
A register by job worker and lot, showing sent, returned, wasted and still with them, answers most of these.