This page works through a scenario. It describes no client and reports no client results. It shows how MatruOS runs job work for a business of this type and size. The figures are arithmetic you can check, with the assumptions stated.
01The business
A fabric converter in Surat buys grey cloth from weavers and sends it to process houses for dyeing, printing and finishing, then sells finished fabric to garment makers and wholesalers. It works with about 25 process houses, sends grey out every day and receives finished fabric back in lots over several weeks. Its turnover in the previous year was above ₹5 crore, so it files ITC-04 every half-year.
02What shrinkage differences cost
Assume the converter sends 2,00,000 metres of grey a month at ₹40 a metre, and that one process house handles 50,000 metres of it. If that house loses 2 percent more length than the best house for the same quality and process, the difference is 50,000 × 2% = 1,000 metres a month, or 1,000 × ₹40 = ₹40,000 a month of grey cost.
The volumes, price and 2 percent are assumptions chosen to show the arithmetic. They are not industry averages. Some shrinkage is normal and varies with the fabric and the process; the point is to compare each house against the converter's own expectation for that fabric and process, lot by lot.
03How it usually runs
- A challan book
- Challans are written by hand or typed in a spreadsheet, numbered by habit.
- Returns in a register
- Finished lots coming back are noted in a register, often without the challan they belong to.
- Shrinkage settled by argument
- Shrinkage, fents and short metres are agreed with each process house when accounts are settled, months later.
- ITC-04 as a project
- Every half-year someone rebuilds the challans and returns from the register to fill ITC-04.
04Why the records matter under GST
Under Section 143 of the CGST Act, inputs sent to a job worker that are not received back within one year are treated as supplied by the principal on the day they were sent, with tax payable and interest under Section 50. The Commissioner can extend the period by up to one year on sufficient cause. Under Rule 45(3) of the CGST Rules, a principal whose aggregate turnover in the previous year exceeded ₹5 crore files ITC-04 every half-year, by 25 October and 25 April; others file once a year.
05How MatruOS runs it
A challan for every dispatch
Grey sent to a process house is recorded on a challan with the process house, the process, the items and metres, the goods type and the place they leave from. The challan carries the e-way bill number and is printed to travel with the goods.
Finished fabric received against the grey it used
When finished fabric comes back, it is received as the finished item against the challan lines it used, with shrinkage and short metres recorded as loss. The finished fabric carries the cost of the grey that went into it. Grey returned unprocessed is received back as it was sent. The balance still at each process house updates at once, and a challan closes when nothing is left.
Quality checked on receipt
A quality plan can check lots received back from process houses, such as shade, width and defects, and hold a lot until it is checked.
Time limits watched
Each challan line carries a due-back date: one year for inputs and three years for capital goods, with no limit for moulds, dies, jigs, fixtures and tools. Lines past their date are marked overdue. The job work screen shows how many challans are open, how many lines are overdue, how many lines are due back within 30 days, and how much material is at process houses.
ITC-04 tables from the same records
The ITC-04 screen shows Table 4 (goods sent) and Table 5A (goods received back) for the chosen period, built from the challans. Each table downloads as a spreadsheet in the column order of the GST portal's ITC-04 offline tool, ready to copy in. Tables 5B and 5C, for goods received back from a different job worker and goods supplied from the job worker's premises, are added on the portal.
Process house bills
Each process house's job-work bill is read from a file or photo and prepared for a person to confirm, and recorded as a supplier bill, so its GST credit is matched against GSTR-2B with the other purchases. The Payables clerk on the AI team warns before process house bills fall due.
06Who does what each day
| Who | What they do |
|---|---|
| Dispatch | Raises a challan for each lot of grey sent, with the e-way bill number |
| Receiving | Receives finished fabric against the challan lines, recording metres and loss |
| Production manager | Reviews shrinkage by process house and overdue lines each week |
| Accounts | Confirms process house bills, files ITC-04 from the downloaded tables |
| Payables clerk, AI team | Warns before process house bills fall due |
07One lot, start to finish (sample data)
- Dispatch sends 5,000 metres of grey rayon to a process house for dyeing on a challan, with the e-way bill number.
- Three weeks later 4,620 metres of dyed fabric come back. Receiving records them as the dyed item against the challan line, with 380 metres as loss, which is 7.6 percent.
- The converter expects about 6 percent for this fabric and process. The production manager sees the lot is 1.6 points above and raises it with the process house while the lot is fresh.
- The process house's bill is read from a photo, and accounts confirms it, which records it as a supplier bill.
- At the half-year, the challan and the receipt appear in the ITC-04 tables without anyone retyping them.
The process house, quantities and percentages are sample data.
08Set up in 7 days
- Process houses, weavers and buyers
- loaded from a Tally or Busy export, with GSTINs.
- Items
- grey and finished qualities set up, so finished fabric can be received against grey.
- Open challans
- grey now at each process house is loaded as opening stock and sent on challans with their original dates, so the time limits run from the right day.
09What to measure
| Measure | How | How often |
|---|---|---|
| Material at process houses | Open balance by process house, in metres and value | Weekly |
| Shrinkage and loss by process house and process | Loss ÷ metres sent, from receipts against challans | Monthly |
| Lines due back within 30 days | Job work screen | Weekly |
| Lines overdue | Job work screen | Weekly |
10Not covered yet
- Grey sent by the weaver straight to the process house. Grey is received into the converter's own godown first.
- A report comparing actual shrinkage with the expected shrinkage for each fabric and process.
- Linking a process house's bill to the lot and adding the processing charge to the cost of the finished fabric. Today finished fabric carries the cost of the grey only.
- Fents and seconds recorded as separate items on the same receipt.
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AI can make mistakes. Bills read from files or photos wait for a person to confirm them; check every challan and the ITC-04 tables before filing.