Procedure for 'inter-unit job work' under GST Act

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Manami Biswas

28 Points Posted on 16 December 2025

I am an auto-parts manufacturer having two units—one in State A and another in State B, each registered under separate GSTINs.
Intermediate goods are sent from State A to State B for job work / further processing, and after processing, the goods are returned to State A.

While sending goods from State A to State B, they are moved under a delivery challan along with an e-way bill.
At the time of returning the processed goods from State B to State A, is it mandatory to issue a "tax invoice" for services (job work charges) from the State B unit to the State A unit, along with a delivery challan and e-way bill?

What is the correct and best-practice procedure under the GST Act for such inter-unit job work transactions?

Replies (2)

Quick Summary

This discussion clarifies the GST procedure for inter-unit job work between two distinct units registered under separate GSTINs. When goods are moved from one unit to another for processing and then returned, the processing unit must issue a tax invoice for the job work services, along with a delivery challan and e-way bill for the return movement of goods. It's crucial to treat these transactions as taxable supplies of service to ensure compliance with the GST Act.

Aashok Kumar Sharma

Finance/Compliance Consultant

77979 Points Posted on 17 December 2025

Yes, when processed goods are returned from State B to State A, it is mandatory for State B to issue a tax invoice for job work services with IGST, in addition to the delivery challan and e-way bill. Inter-unit job work between different GSTINs must always be treated as a taxable supply of service.

Rushabh

Automation Expert

10733 Points Posted on 14 November 2026

Yes, if the two units have separate GSTINs, they are distinct persons under GST—even if owned by the same company. The processing supplied by State B to State A is therefore a taxable inter-State service, ordinarily chargeable to IGST. State B should issue a tax invoice for the job-work charges; the return movement of the processed goods is a separate goods movement and should be documented accordingly.

State A, as principal, should send inputs under a delivery challan in accordance with section 143 and the job-work rules, with an e-way bill where required. Record the movement in the prescribed job-work records and follow the applicable return/supply timelines.
On return, State B should issue a delivery challan for the processed goods, identifying the original challan and goods returned. Where an e-way bill is required, generate it for this goods movement. The job-work invoice may accompany the consignment, but it does not replace the delivery challan for the goods.
The invoice for job-work charges should be raised within the applicable time limit for services, and State A may claim eligible input tax credit subject to the usual conditions. If goods are not returned or supplied within the section 143 timelines, the statutory deemed-supply consequences may arise.
Check the applicable e-way-bill threshold and exemptions for the particular movement, and ensure the challan, invoice and e-way bill particulars reconcile. The precise document handling can depend on who arranges transport and the facts of the processing arrangement.

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