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GST Registration & Job Worker
The Goods and Services Tax regime has indeed simplified the entire scenario of indirect taxation. All aspects of day to day business are properly covered and systemised under GST, and hence, GST has resulted in great ease of doing business.
There are provisions for GST registration under GST laws for different type of business activity.Now, GST department has slightly amended the provisions for GST registration for Job workers. As per the new provision, a Job worker is required to get GST registration only if his aggregate turnover, in a financial year exceeds the threshold limit of ₹20 Lacs.
Let imus first understand the concept of Job work.
#1. WHAT IS MEANT BY JOB WORK?
Job work simply means that a person undertakes a treatment or processing of the goods belonging to another trader who is having GST registration.
Here, the person who has undertaken treatment or further processing of the goods is called ‘principal’’.
The person to whom actually the goods belong is called ‘job worker’.
#2. HOW IS JOB WORK DEFINED UNDER GST LAWS?
As per the Section 2(68) of the CGST Act 2017-
‘Job work’ refers to any treatment or process undertaken by a person (job worker) on goods of another person having GST registration, who is referred to as Principal.
Whereas the person who is consigning the goods for the job work (Principal) has to get a GST registration, the rules for GST registration conditionally apply on the job worker.
#3. WHEN DOES THE JOB WORKER REQUIRE GST REGISTRATION?
From 1st February 2019,
A Job worker is required to obtain GST registration only in case his aggregate turnover in a particular financial year is beyond the threshold limit of ₹20 Lacs.
This is irrespective of whether the principal and the job worker are situated in the same State or in different States.
#4. WHAT WERE EARLIER PROVISIONS FOR JOB WORKER?
Earlier, a Job-worker was supposed to get compulsory GST registration only if his principal is located in other states, irrespective of threshold limit.
Previously, provisions of section 24(i) of the CGST Act 2017 had applied, which provides for compulsory registration of suppliers making any inter-State supply of services.
After 1st February 2019, a Job worker needs to get GST registration only in case his aggregate turnover in a particular financial year is above the threshold limit.