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Sales invoice as expense

Rajesh PB (80 Points)

14 April 2021

Greetings,

My cilent doing jewellery wholesale trading and manufacturing goods by outsourcing .

He don't pay job work wages as cash but will not take dusts wastes of silver/gold .

Job workers retains those dusts waste as his payment.

1.need to issue sales invoice of the dust on the job worker name?

2.TDS need to be deducted? But not paid as cash .

3.if need to deduct tds the limit ?

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3 Replies

CA Altamush Zafar (GST Consultant) (15907 Points)
Replied 14 April 2021

For job work you need to file ITC -04.

Residues taken by job worker will have to be invoiced by both the jeweler and the job worker since residue powder sold by jeweler and job work done by job worker.

Rajesh PB (80 Points)
Replied 14 April 2021

@ CA Altamush Zafar in that case residue powder is the payment to the jobworker, is there TDS limitations ? or TDS wont cover such activities ?

Pankaj Rawat (GST Practitioner) (55032 Points)
Replied 15 April 2021

1. Yes need to Issue Tax Invoice to Job worker .
In term of Section 143(5) of CGST Act , When job worker Registered then it can be supply by him paying GST on same & in case of How worker is Unregistered then waste shall be returned to principal & which would be then supplied by Principal.
So as in your case the Job worker in barter system retain the waste but the same is cover under Supply in term of Section 7 of CGST Act.

Hence the principal will raise the Tax invoice for the Waste retain by Job worker & Job worker will raise Tax Invoice for Job work.

2. Yes TDS need to be deducted u/s 194C by principal (dedicated on invoice or payment whichever is earlier)

3. If the payment that is being made to the contractor does not exceed Rs. 30,000, No TDS on payment to contractor is required to be deducted. However, if the total of all such payments made or to be made during a financial year exceeds Rs. 75,000; TDS shall be deducted under Section 194C at the rates mentioned above.

In my view the Bill being raise by principal for waste (As squaring of Job work) must be treated as payment to Jobworker.

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