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Accounting entry for scrap in job work.

19 June 2022

What entry should be passed for scrap sold by job worker, registered or unregistered.
if job work charges are worked out considering the scrap value, will it have to be added to the job work charges?

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4 Replies

sabyasachi mukherjee (26843 Points)
Replied 19 June 2022

Scrap sold will be normal entry.
registered or unregistered.

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Chirag Mehta (26 Points)
Replied 19 June 2022

It's not as simple as normal entry bcoz if job work charges are depressed, then scrap value will be added to job work charges. then who should account for sale of scrap? principal or job worker? some articles says principal should raise invoice to regd. job worker.

if job worker is unregistered and if he sold the scrap then should I raise sale invoice for scrap on job worker?

sabyasachi mukherjee (26843 Points)
Replied 20 June 2022

Job work charges will be added to cost of scrap of goods and then any realization will be set off.

Chirag Mehta (26 Points)
Replied 20 June 2022

Ok. then let's say job charges is 6000, scrap sold is 2000, then total JW charge is 8000 from which realisation can be set off. and I need to pay gst on 8000 towards job work.