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GST on Job Work — Rates, Rules & ITC for Principal

Updated: 3 June 2026  |  CGST Act  |  Section 143 & Section 2(68)

GST on job work varies by type: textile/apparel 5%, engineering/metal fabrication 18%, diamond cutting 1.5%, printing 12%. Principal sends goods by delivery challan (no GST on dispatch). Goods must return within 1 year (inputs) or 3 years (capital goods). ITC stays with principal.
Section 143
Principal can send goods for job work without GST — delivery challan issued, ITC retained by principal.
Return deadline: 1 year for inputs, 3 years for capital goods. Exceeded deadline = treated as taxable supply from dispatch date.

Job Work GST Rates by Industry

Job Work TypeGST RateSACNote
Textile / apparel (stitching, dyeing)5%9988—
Leather goods manufacturing5%9988—
Food / agri processing5%9988—
Jewellery making (precious metals)5%9988—
Diamond cutting and polishing1.5%9988Special notification
Printing job work12%9988—
Engineering / metal fabrication18%9988—
Plastic processing / moulding18%9988—
Chemical processing18%9988—
IT / software development (outsourced)18%9983—

Frequently Asked Questions

What is job work under GST and how is it taxed?
Job work under GST (Section 2(68) CGST Act): any treatment or process undertaken by a person on goods belonging to another registered person (the "principal"). The job worker processes the goods and returns them — not purchasing or selling. GST is payable on the job work service charge (not the full value of goods). Rates depend on the type of job work. Principal can send inputs/capital goods to job worker without paying GST (treated as supply to job worker at 0% subject to conditions). Key: job worker gets registered if turnover > ₹20L; otherwise may be unregistered (principal pays RCM if applicable).
What are the GST rates for different types of job work?
Job work GST rates (SAC 9988): Textile/apparel job work (cutting, stitching): 5% GST. Leather goods job work: 5% GST. Food/agriculture processing job work: 5% GST. Engineering/metal fabrication job work: 18% GST. Diamond cutting and polishing: 1.5% GST. Printing job work: 12% GST. Plastic processing job work: 18% GST. Software/IT development (outsourced job work): 18% GST. Jewellery making on job work basis: 5% GST (precious metals). Chemical processing job work: 18% GST. The rate depends on what the job worker does — textile at 5% is the lowest; most other manufacturing job work is 18%.
How does a principal send goods to job worker under GST?
Sending goods for job work — GST procedure: (1) Principal is NOT required to pay GST when sending inputs to job worker (Section 143 CGST Act). (2) Principal must issue a delivery challan (not a tax invoice) — challan includes: description of goods, quantity, value, GSTIN of sender/recipient. (3) Goods must be returned within: 1 year for inputs. 3 years for capital goods. (4) If not returned within time limit: the original dispatch is treated as a taxable supply by the principal on the dispatch date — principal must pay GST + interest retrospectively. (5) Job worker files returns showing job work received and processed. ITC on inputs remains with principal — not transferred to job worker.
Can a job worker claim Input Tax Credit?
Job worker and ITC: Registered job worker: can claim ITC on own inputs purchased for the job work (tools, consumables, packing materials used in job work process). Cannot claim ITC on goods sent by the principal — those belong to principal. Job worker bills the principal for services — principal gets ITC on service charge GST. Principal's ITC: principal retains full ITC on inputs sent to job worker. Principal also gets ITC on the job work service fee (GST charged by job worker). Unregistered job worker: no ITC available. Principal may pay GST under RCM (Rule 39) if job worker is unregistered. Exception: agricultural produce job work — even if job worker unregistered, may not attract RCM.
What is the time limit for returning goods from job worker?
Time limits for job work (Section 143 CGST Act): Inputs (raw materials sent for processing): must be returned or dispatched from job worker's premises within 1 year of being sent. Capital goods (machinery sent to job worker): must be returned within 3 years. Moulds, dies, jigs, fixtures, tools: NO time limit restriction — can remain with job worker indefinitely. Consequence of exceeding time limit: the original sending of goods is treated as a "supply" by the principal. Principal must issue a tax invoice and pay GST from the date of original dispatch. Interest also applies. Extension: principal can apply to jurisdictional commissioner for extension of time limit in genuine cases.

Related Pages

GST on Textile Input Tax Credit GST on Manufacturing GST Registration Reverse Charge GST
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