ITC of Job Worker

The gold is given by the jewellery shop to the goldsmith(Job worker) for making ornaments. At the time of manufacturing jewels some amount of gold is getting damaged/evaporated. To compensate such amount of gold, the job worker purchasing and refilling with the gold which given by the jewellery with the knowledge of the jewellery.

For this all process, the job worker is billing the jewellery at 5% (As Service Bill - Job Work).

Now my question is, the gold he(Job Worker) purchased to refill was 3% GST Paid on Purchase.

Whether the job worker(Goldsmith) can claim the ITC on such gold he purchased?

Replies (9)
Quick Summary
This discussion clarifies whether a job worker, such as a goldsmith, can claim Input Tax Credit (ITC) on gold purchased to compensate for manufacturing wastage. The consensus is that ITC can indeed be claimed on such business-related purchases, provided a proper invoice is available. It also addresses scenarios where ITC might have been reversed previously and the implications of purchasing machinery with a higher GST rate than the service provided.

Yes ITC can be claimed

The old accountant who handled this case has reversed the unclaimed ITCs. So I had a doubt that whether he has reversed / unclaimed the ITC Purposefully.

Please confirm once again sir.

Yes it is purchased for the purpose business. ITC can be claimed if you have proper invoice

Yes job worker can claim itc on his inputs.

What if the ITC for a particular year has already been reversed?

What will happen if the job worker purchased small machine at 18 % gst for this purpose only but he is collecting only 5 % tax. Can he use full  18 % ITC ?

Yes full itc can be claimed and be utilised with time 

Meaning all ITC can be claimed in his GSTR3B in a single month only?

Yes it can be

No issues

 

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