Mastering Job Work and Subcontracting: GST Annexure, Challan Tracking, and Stock Reconciliation

The Subcontracting Landscape in Indian Manufacturing

Automotive and machinery manufacturers regularly send semi-finished goods to external job workers for specialized processes like heat treatment, powder coating, electroplating, or CNC gear cutting. Under GST law (Section 143), sending goods without paying tax requires strict compliance.

Statutory Timelines and ITC-04 Mandate

Inputs sent for job work must return to the principal factory within 1 year (or 3 years for capital goods). If the goods are not returned within the prescribed window, the original transfer is legally deemed a taxable supply from the date of dispatch, attracting back-dated tax with penal interest.

Relaso Manufacturing ERP & Inventory tracks job-work delivery challans, monitors aging days, reconciles process loss, and compiles automated ITC-04 quarterly annexures.