GST on Job Work – Big Changes from 22nd September 2025
Job work is when a job-worker processes goods owned by another registered person (Principal). Under GST, the Principal is responsible for compliance (challans, records, ITC), while the job worker does the processing.
New GST Rates for Job Work (from 22 Sept 2025)
| Item | Current GST Rate | New GST Rate |
|---|---|---|
| Job work on Umbrellas | 12% | 5% |
| Job work for printing (Ch. 48 & 49, attracting 5% GST) | 12% | 5% |
| Job work on bricks (5% GST) | 12% | 5% |
| Job work on Pharmaceuticals (Ch. 30) | 12% | 5% |
| Job work on Hides, Skins & Leather (Ch. 41) | 12% | 5% |
| Residual job work (not elsewhere covered) | 12% | 18% 🚨 |
Practical Impact for Businesses
- MSMEs & job workers in sectors like pharma, leather, bricks, umbrellas → Big relief as tax drops from 12% → 5%. Makes services more affordable & competitive.
- Residual/general job work → Rate goes up from 12% to 18%. Industries outside notified categories must prepare for higher working capital blockage.
- Principal can still avail ITC on inputs sent directly to job workers, even without bringing them to own premises first (Section 19 CGST Act).
- Goods must be returned to Principal:
- Inputs = within 1 year
- Capital goods = within 3 years
Otherwise, deemed supply → tax liability arises.
- Unregistered job workers → Still 18% (as clarified by Circular 126/45/2019).
Key Compliance Point
Even though the GST rate changes, the compliance responsibility remains with the Principal:
- Issue challan for goods sent to job worker
- Maintain input/capital goods records
- Ensure timely return of processed goods
Relief for specific industries (Pharma, Leather, Bricks, Umbrella, Printing) with GST dropping to 5%. But general job work costlier at 18%. Principals should review contracts with job workers before Sept 22 to align invoices & ITC planning.
You must be logged in to post a comment.