The GST regime has introduced a system of input credit on job work, a move that has been welcomed by small and medium business owners in India. Input credit on job work allows businesses to claim a credit on input taxes paid on certain goods and services used by subcontractors or job workers. In order to claim input credit on job work, businesses must submit a form known as the ITC-04.
The ITC-04 is a form used to claim input tax credit (ITC) on goods sent for job work. It is filed by the principal manufacturer or supplier of the goods. The form lists the details of goods sent for job work, the location of the job worker, and the details of the job worker. The form must be filed every quarter.
Filing ITC-04 on the GST portal is a simple process. Follow the steps below:
Input credit on job work can be claimed by the principal manufacturer or supplier of the goods. The credit can be claimed on the taxes paid on goods or services used in the manufacture of the final product. The input credit can be claimed on goods sent for job work as well as on the services provided by job workers.
However, input credit cannot be claimed if the goods sent for job work are not returned within a period of one year from the date of sending the goods. In such a case, the input credit claimed earlier will have to be reversed and tax paid on the same.
The process of claiming input credit on job work through ITC-04 is simple and straightforward. It is important for businesses to file the form every quarter to claim the input credit. Input credit on job work is a great way for businesses to reduce their tax liability and improve their bottom line. It is important to keep track of the goods sent for job work and ensure that they are returned within a year to avoid any reversal of input credit.
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