Last updated: 4 September 2026. Send goods to a job worker under Section 143 of the CGST Act and no tax is payable on the despatch — but a clock starts. Inputs must come back, or be sold from the job worker's premises, within one year; capital goods get three years. Miss the date and the law does not fine you. It decides, retrospectively, that you sold those goods on the day they left your gate, with interest running from that day.
Applicability Note: This guide is based on GST provisions applicable as of 4 September 2026. Job work compliance rests on your own challan records, which no portal can reconstruct for you. Always verify the current position on gst.gov.in or with a GST professional before taking action.
Who Should Care?
This applies to:
- Manufacturers who outsource any stage of production — plating, machining, printing, dyeing, packing, assembly
- Anyone who has parked moulds, dies or tooling at a vendor and forgotten about them
- Job workers, deciding whether they need to register at all
- Principals above ₹5 crore, whose FORM GST ITC-04 for April–September 2026 is due 25 October 2026
1. What Section 143 Offers — and Why It Is Optional
Section 2(68) defines job work as any treatment or process undertaken on goods belonging to another registered person. The owner is the "principal", the processor the "job worker". Section 143(1) lets a registered principal send inputs or capital goods to a job worker without payment of tax, under intimation and subject to prescribed conditions, and onward from that job worker to another. Without it, every despatch to a vendor would have to be tested against the supply provisions.
Read the word may. Circular No. 38/12/2018-GST dated 26 March 2018, para 6: the provisions apply only to a registered person, and "the registered person (principal) is not obligated to follow the said provisions. It is his choice." Selling the inputs to your vendor and buying the finished goods back is a lawful alternative — it simply costs cash flow.
Two points settle most opening questions. Circular 38 para 5: the job worker may use his own goods alongside yours. And the Explanation to Section 143 makes "input" include intermediate goods — a half-finished component moving between two job workers is still an input, still on the same clock.
2. The Two Clocks, and What Sits Outside Them
Section 143(1)(a) and (b) give two ways to stop the clock: bring the goods back to any of your places of business, or supply them from the job worker's premises — within India on payment of tax, or for export with or without.
| Inputs | Capital goods | |
|---|---|---|
| Time limit | One year | Three years |
| Statutory extension | Up to one further year | Up to two further years |
| Who grants it | The Commissioner, on sufficient cause shown — second proviso to Section 143(1) | |
| Outside the limit entirely | — | Moulds and dies, jigs and fixtures, or tools |
| Deemed supply on breach | Section 143(3) | Section 143(4) |
That extension is not original to the Act — it came in as the second proviso to Section 143(1) with the Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018), in force 1 February 2019. It is discretionary, and it is a request you make to the Commissioner, not something that follows from a project running late.
The carve-out for moulds and dies, jigs and fixtures, or tools is the most useful line in the section. It sits inside the description of capital goods in 143(1)(a) and (b), and Section 19(7) disapplies the deeming fiction to them altogether. Tooling placed at a vendor's factory can stay there indefinitely — Circular 38 para 9.6: there is "no requirement of either returning back or supplying the goods from the job worker's place of business/premises as far as moulds and dies, jigs and fixtures, or tools are concerned."
Selling from the job worker's premises carries a condition. Under the first proviso to Section 143(1) you may not, unless you have declared that premises as your additional place of business, the job worker is registered under Section 25, or the goods are notified by the Commissioner. And it is your supply, per Circular 38 paras 7 and 9.4(ii): your invoice, your place of supply, your LUT on an export.
3. Where the Clock Starts — the Direct-Despatch Trap
Section 143 measures the period from the goods "being sent out". Read only that, and a common arrangement quietly breaks: your supplier ships straight to the job worker and the goods never reach you. Section 19(2) and 19(5) protect the credit — notwithstanding clause (b) of Section 16(2), you may claim it though you never received the goods, which the ordinary ITC conditions would block. The timing rule sits elsewhere:
The proviso to Section 19(3), and the identical proviso to Section 19(6), provide that "where the inputs are sent directly to a job worker, the period of one year shall be counted from the date of receipt of inputs by the job worker" — three years, on receipt, for capital goods. Section 143 contains no such proviso. On a direct despatch, the start date is the job worker's receipt, and your evidence of it is his acknowledgement, not your supplier's invoice.
4. The Challan Is the Compliance: Rule 45 and Rule 55
Job work movement is not documented by an invoice, because there is no supply to invoice. Rule 45(1) requires the goods to travel under a challan issued by the principal, including on direct despatch, and Rule 45(2) requires that challan to carry the nine particulars in Rule 55 — the delivery challan, which Rule 55(1)(b) expressly provides for "transportation of goods for job work". Quantity may be provisional where the exact figure is not known. Rule 55(2) requires it in triplicate: ORIGINAL FOR CONSIGNEE, DUPLICATE FOR TRANSPORTER, TRIPLICATE FOR CONSIGNER.
Movement between job workers has its own mechanics, in Rule 45(1) as amended by Notification No. 14/2018-Central Tax dated 23 March 2018 and in Circular 38 para 8.4:
- To one job worker: two copies travel with the goods, one comes back with them.
- Job worker to job worker: a fresh challan, or the principal's challan endorsed by the sending job worker with quantity and description — and endorsed again by the next.
- Piecemeal returns: an endorsement will not do. Circular 38 para 8.4(v) requires a fresh challan from the job worker.
On the road, the third proviso to Rule 138(1) overrides the ₹50,000 threshold: where a principal in one State or Union territory sends goods to a job worker in another, an e-way bill is required irrespective of the value of the consignment, generated by the principal or the registered job worker — see our e-way bill guide. The proposed enhancements, including the Ship-To GSTIN capture job work would have used, remain on hold under the GSTN advisory dated 29 July 2026.
5. FORM GST ITC-04 — and the 25 October 2026 Date
Rule 45(3) requires the principal to report the challan details for goods despatched to and received from job workers in FORM GST ITC-04, by the twenty-fifth of the month succeeding the period. Circular 38 paras 8.4(i) and 8.4(vi) give it a second job: "The FORM GST ITC-04 will serve as the intimation as envisaged under section 143 of the CGST Act." The intimation Section 143(1) speaks of is not a letter to your officer — it is this return.
How often you file it changed with Notification No. 35/2021-Central Tax dated 24 September 2021, effective 1 October 2021: "quarter" came out, "specified period" went in, defined by an Explanation.
| Aggregate turnover in the immediately preceding FY | Specified period | Due date |
|---|---|---|
| More than ₹5 crore | Six months: April–September, and October–March | 25 October and 25 April |
| ₹5 crore or less | The financial year | 25 April |
For the current half-year the test is your aggregate turnover for FY 2025-26 — the PAN-wide figure under Section 2(6), not the system-computed AATO on your dashboard, which keeps updating as you file. Above ₹5 crore, your ITC-04 for April–September 2026 is due Sunday, 25 October 2026 — and no CBIC instrument shifts a GST due date for a weekend. Annual filers meet the same quirk next year: 25 April 2027 is also a Sunday.
ITC-04 carries no late fee: Section 47 attaches late fee to the statement of outward supplies and the returns it names, and a declaration under Rule 45(3) is not among them. What remains is Section 125 — "a penalty which may extend to twenty-five thousand rupees", mirrored in each State Act — and, far more expensively, the consequence in the next section.
6. When the Clock Runs Out
Sections 143(3) and 143(4) do not create a penalty. They create a supply that was always there:
"it shall be deemed that such inputs had been supplied by the principal to the job worker on the day when the said inputs were sent out."
Rule 45(4) and Circular 38 para 9.6, as amended, spell out what follows: issue an invoice, declare the supply in the return for the month the period expired, pay the tax — but the date of supply is the original despatch date, and "interest for the intervening period shall also be payable on the tax". On a consignment sent in October 2025 and never returned, the tax falls due in the October 2026 return, but on a supply dated October 2025 — and the interest runs for that intervening period. Rule 45(4) names FORM GSTR-1 as the place to declare it.
Goods that come back afterwards are not a late return. Circular 38 para 9.6 treats them as a fresh supply by the job worker to the principal, on which he pays GST if he is liable to be registered. Waste and scrap escape the fiction: Section 143(5) lets scrap generated during job work be supplied direct from the job worker's premises on payment of tax if he is registered, and by the principal if he is not.
7. Two Things Job Work Guides Still Get Wrong
The reverse charge sentence that no longer exists. Circular 38, as first issued, said in two places that where the job worker is unregistered, GST would be payable by the principal on reverse charge under Section 9(4), "kept in abeyance for the time being". Circular No. 88/07/2019-GST dated 1 February 2019 deleted that sentence from both paragraphs, consequent on the substitution of Section 9(4) by the CGST (Amendment) Act, 2018 — and prints the original and amended text side by side, so this is documentary, not interpretation. Reproductions of the 2018 text still circulate with the sentence intact.
Job workers do not register because they do job work. Circular 38 para 6.1, as amended by Circular 88, is explicit: a job worker needs registration only where his own aggregate turnover crosses the Section 22(1) threshold, whether or not he and the principal are in the same State — the inter-State services exemption being Notification No. 10/2017-Integrated Tax dated 13 October 2017 as amended by Notification No. 3/2019-Integrated Tax dated 29 January 2019. Explanation (ii) to Section 22 keeps that threshold within reach: goods supplied by a registered job worker after job work count as the principal's supply, and their value is excluded from his aggregate turnover. His turnover is his processing charges.
On those charges, the rate position moved with the 56th GST Council changes effective 22 September 2025. CBIC's published FAQs state that "all residual job work services or other manufacturing services have been aligned to 18% with ITC", while specific entries survive at lower rates. The entry-wise table sits in Notification No. 11/2017-Central Tax (Rate) dated 28 June 2017 as amended — check your own heading 9988 entry rather than assuming the residual rate.
Key Takeaways
- One year for inputs, three years for capital goods, extendable only by the Commissioner on sufficient cause — by one and two further years, under the second proviso to Section 143(1).
- Moulds and dies, jigs and fixtures and tools have no time limit. Section 19(7) takes them out of the deeming fiction entirely.
- On a direct despatch the clock starts on the job worker's receipt — the provisos to Section 19(3) and 19(6). Keep his acknowledgement.
- The challan is the compliance: Rule 45 with Rule 55, in triplicate, endorsed between job workers.
- ITC-04 is the intimation Section 143 asks for. Above ₹5 crore, April–September 2026 is due 25 October 2026, a Sunday that does not move.
- Breach is retrospective. The supply is dated to the day the goods left, so interest is payable for the intervening period, not only from expiry.
Frequently Asked Questions
What is the time limit for job work under GST?
One year for inputs and three years for capital goods from their being sent out, under Section 143(1)(a) and (b) of the CGST Act. On sufficient cause shown, the Commissioner may extend those by one and two further years under the second proviso to Section 143(1). Moulds and dies, jigs and fixtures and tools sit outside the limits.
When is FORM GST ITC-04 due for April–September 2026?
25 October 2026, for a principal whose aggregate turnover in FY 2025-26 exceeded ₹5 crore. Principals at or below ₹5 crore file annually, by 25 April following the financial year. The frequency comes from the Explanation to Rule 45(3), inserted by Notification No. 35/2021-Central Tax dated 24 September 2021 with effect from 1 October 2021.
Do I need to file a nil ITC-04 if I sent nothing for job work?
Rule 45(3) requires the details of challans issued during the specified period to be furnished, so where no goods moved there are none to report. We could locate no notification or GSTN advisory requiring a nil ITC-04. Many advisers file one anyway to close the period on record — check the position for your GSTIN before you skip it.
Does a job worker have to register under GST?
Only if his own aggregate turnover crosses the Section 22(1) threshold — the same test as any other supplier, whether or not he is in the principal's State, per Circular No. 38/12/2018-GST para 6.1 as amended by Circular No. 88/07/2019-GST dated 1 February 2019. Under Explanation (ii) to Section 22, goods supplied by a registered job worker after job work count as the principal's supply, and their value is excluded from his turnover.
Disclaimer: This article is for informational purposes only and does not constitute professional tax advice. GST rules are subject to frequent changes through notifications and circulars. Please consult a qualified tax professional or verify the current provisions on the official GST portal (gst.gov.in) before making any compliance decisions.
Have a specific question about job work, delivery challans or your ITC-04 position? Our GST experts can help → gstconsultancy.com