Textile plays a major role in Indian economy:
(i) It contributes 14% to Industrial Production and 4% to GDP.
(ii) With over 45 million the industry is one of largest source of employment in the Country
The Size of the Indian textile market as on July 2017 was around US $ 150 billion which is expected to touch US $ 250 billion market by 2019 growing at a C.A.G.R. of 13.58% between 2009 to 2019.
An overview of the process of textile industry
Yarn is purchased generally from the mill agents or their subagents, the yarn purchased is sent to knitting houses for the purpose of making it a Grey Fabric. The Grey Fabric is then send to dyeing houses for dyeing which takes the form of Fabric which is then used for varied purposes.
The article aims to bring in my views with regard to the GST compliances of Job work in textile industry with special emphasis on ITC-04, E .Way bill and delivery challan.
A. When Goods are directly dispatched by the supplier to the job worker that is the goods do not enter the place of business of the principal manufacturer.
(Yarn is generally delivered to the knitting houses for making Grey Fabric, directly)
Invoice: The invoice issued by the supplier of Yarn should be in the form of 'Bill to Ship to' manner wherein the Bill to part should be addressed to Principal Manufacturer and Ship to to the Job worker at whose place goods are being delivered.
E-Way Bill: The E. Way Bill should be addressed to principal manufacturer and in the 'Place of dispatch' contain the address of Job worker.
Delivery Challan: The principal should issue a delivery challan which should contain the quantity and value (Value at this stage should be the cost of Yarn) and other contents of a delivery challan as per Rule 55(1) and 55(2) of Chapter VI Of CGST Rules 2017.
B. When goods are sent from job-worker to another job-worker:
(Grey Fabric being sent to the dyeing houses for dyeing)
E-Way Bill: The E. Way bill required should be prepared by selecting Job Work in the outward supply option, document number should be the Deliver Challan Number.
Option 1: The challan issued by the principal manufacturer to the job worker can be endorsed to another job worker.
Option 2: A fresh challan can be prepared by the job worker for sending goods to another job-worker and the fresh challan should have a cross reference of the original challan.
C. When goods are received back by the principal from the job worker:
(When goods are received back from the dyeing house)
E Way Bill: The E. Way bill required should be prepared by selecting Job Work in the outward supply option, document number should be the Deliver Challan Number.
Option 1: The job worker should send one copy of the delivery challan as received from the principal manufacturer (Only possible if it is either an endorsed challan or the jobworker has the original challan with him)
Option 2: The job worker can send the goods on his own challan which will have cross reference of the original challan received.
It is an intimation required as per Rule 45(3) were in a principal manufacturer is require to give the challan details in respect of goods being sent
1- To a job worker
2- From one job worker to another job worker
We hope this will bring clarity in respect of the provisions. Kindly note these are our views only.