In case of textile job work, sometimes the job worker returns short quantity and hence is debited by the principal. What will be GST treatment of the same?
For e.g. P sent 1000 kg of yarn to JW for knitting in to fabric. JW returned 980 kg of fabric and charged Rs. 10/kg. Since he delivered 20 kg short, he was debited Rs. 100/kg.
His net invoice in current (Pre GST regime) scenario is :
Processing Charge = 980kg *10 = 9800/-
Less: Shortage = 20kg*100 = -2000/-
Total Invoice value = 7800/-
Under GST regime, 5% is chargeable on 9800/-. But what happens to the shortage component. May I request for help in this regard.
CAclubindia
