Section 143 at a Glance
Contents
1. Statutory Text of Section 143
(1) A registered person, referred to as the “principal”, may under intimation and subject to prescribed conditions send any inputs or capital goods, without payment of tax, to a job worker for job work and from there subsequently send them to another job worker and likewise, and shall—
(a) bring back inputs, after completion of job work or otherwise, or capital goods, other than moulds and dies, jigs and fixtures, or tools, within one year and three years, respectively, of their being sent out, to any of his places of business, without payment of tax; or
(b) supply such inputs, after completion of job work or otherwise, or capital goods, other than moulds and dies, jigs and fixtures, or tools, within one year and three years, respectively, of their being sent out from the place of business of a job worker on payment of tax within India, or with or without payment of tax for export, as the case may be.
Provided that the principal shall not supply the goods from the place of business of a job worker under clause (b) unless the principal declares the job worker's place of business as an additional place of business, except where the job worker is registered under section 25 or where the principal is engaged in supply of goods as may be notified by the Commissioner.
Provided further that the period of one year and three years may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding one year and two years respectively.
(2) The responsibility for keeping proper accounts for the inputs or capital goods shall lie with the principal.
(3) Where inputs are not received back by the principal after completion of job work or otherwise in accordance with clause (a) of sub-section (1), or are not supplied from the job worker's place of business in accordance with clause (b), within one year of being sent out, the inputs shall be deemed to have been supplied by the principal to the job worker on the day the inputs were sent out.
(4) Where capital goods, other than moulds and dies, jigs and fixtures, or tools, are not received back or supplied from the job worker's place of business within three years of being sent out, they shall be deemed to have been supplied by the principal to the job worker on the day the capital goods were sent out.
(5) Notwithstanding sub-sections (1) and (2), waste and scrap generated during job work may be supplied by the job worker directly from his place of business on payment of tax if the job worker is registered, or by the principal if the job worker is not registered.
Explanation. For the purposes of job work, “input” includes intermediate goods arising from any treatment or process carried out on the inputs by the principal or the job worker.
2. Section 143 Explained in Simple Language
Job work is common in manufacturing and other industries. A principal may own raw material but use an outside specialist for machining, coating, fabrication, heat treatment, testing, packing or another process.
GST does not require the principal to treat every movement of those goods to a job worker as a sale. Section 143 creates a special procedure so that eligible goods can move without payment of GST, provided the statutory conditions are followed.
But “no GST on movement” does not mean “no compliance”
- Movement must be properly documented.
- The principal remains responsible for accounting.
- Inputs and capital goods have different return/supply periods.
- Direct dispatch and multi-stage job work need proper records.
- ITC-04 and other prescribed reporting requirements must be followed where applicable.
- Late return can convert the original movement into a deemed supply.
3. Principal, Job Worker and Job Work
Who is a principal?
Section 143 refers to the registered person who sends inputs or capital goods for job work as the principal.
Who is a job worker?
Section 2(68) defines job work as treatment or process undertaken by a person on goods belonging to another registered person. The person performing that treatment or process is the job worker.
Examples of job work
| Industry | Possible job-work process |
|---|---|
| Engineering | CNC machining, turning, grinding |
| Steel | Cutting, fabrication, coating |
| Automotive | Heat treatment, plating, component processing |
| Textiles | Dyeing, printing, finishing |
| Food processing | Specified processing/packing activities depending on facts |
| Electronics | Assembly, testing or specialised processing |
4. Section 143(1): Sending Inputs or Capital Goods for Job Work
The principal may send inputs or capital goods to a job worker without payment of tax, subject to intimation and prescribed conditions.
The law also permits the goods to move from one job worker to another job worker and then to another, without requiring the goods to return physically to the principal after every stage.
Steel blanks are sent by the principal to a forging job worker, then to a machining job worker and then to a plating job worker. Section 143 permits subsequent movement between job workers, subject to the prescribed documentation and controls.
5. Inputs – One-Year Rule
Inputs sent to a job worker must generally be brought back to any place of business of the principal, or supplied from the job worker's place of business, within one year from the date they were sent out.
| Option | Tax treatment |
|---|---|
| Return to principal's place of business | Can be without payment of tax, subject to the provision. |
| Supply from job worker's premises | Principal may supply on payment of tax within India or with/without payment for export, subject to conditions. |
| Not returned/supplied within one year | Deemed supply to job worker from the date of original dispatch. |
6. Capital Goods – Three-Year Rule
Capital goods sent for job work have a longer statutory period: three years from the date they are sent out.
The special three-year rule does not cover moulds and dies, jigs and fixtures, or tools in the same way because Section 143(1) specifically excludes those items from the return/supply time limit.
A specialised CNC machine is sent to a job worker on 1 April 2026. The normal statutory period for the covered capital good is three years from that date, subject to any valid Commissioner extension and the other conditions of Section 143.
7. Direct Dispatch to the Job Worker
GST law allows the principal to send inputs or capital goods directly to the job worker without first bringing them to the principal's own place of business. Section 19 separately permits the principal to claim ITC on qualifying inputs/capital goods sent directly to the job worker, subject to the statutory conditions.
A manufacturer purchases raw material and instructs the supplier to deliver it directly to the registered job worker. The goods need not first travel to the principal's factory merely for GST credit purposes, provided the statutory conditions are met.
8. Movement From One Job Worker to Another
Section 143 expressly permits the goods to move from one job worker to another job worker. This is useful where manufacturing involves multiple specialised processes.
For example, a component may go through forging, machining, heat treatment, painting and testing at different locations.
| Stage | Control |
|---|---|
| Principal → Job Worker 1 | Original challan and movement evidence. |
| Job Worker 1 → Job Worker 2 | Endorsement/appropriate challan trail and quantity reconciliation. |
| Job Worker 2 → Job Worker 3 | Continue the document chain. |
| Final return → Principal | Reconcile original quantity, processed quantity, scrap and losses. |
Rule 45 provides for challan-based movement and allows the challan trail to be endorsed in specified job-worker-to-job-worker movements.
9. Supply From the Job Worker's Premises
Section 143 allows the principal to supply inputs or capital goods from the job worker's place of business within the permitted period.
Additional place of business condition
Normally, the principal must declare the job worker's place of business as an additional place of business before supplying goods from that location under Section 143(1)(b).
There are important exceptions:
- the job worker is registered under Section 25; or
- the principal is engaged in supply of goods as may be notified by the Commissioner.
A principal wants finished goods to be dispatched directly from a job worker's premises to its customer. Before doing so under Section 143, the company should verify whether the additional-place-of-business requirement applies or whether an exception is available.
10. Section 143(2): Who Is Responsible for the Accounts?
The principal has the responsibility for keeping proper accounts for inputs and capital goods sent for job work.
What should the principal track?
- Item description and code
- Quantity sent
- Date of dispatch
- Job worker GSTIN and location
- Challan number
- Process performed
- Movement to another job worker
- Quantity returned
- Quantity supplied from job worker premises
- Waste/scrap generated
- Outstanding quantity
- Statutory due date
- Extension, if any
11. Section 143(3): Deemed Supply of Inputs on Delay
If inputs are not returned to the principal or supplied from the job worker's place within the one-year period, Section 143(3) deems that the principal supplied the inputs to the job worker on the day the inputs were originally sent out.
This is a critical GST consequence because the tax event is legally shifted back to the original dispatch date.
Inputs worth ₹10 lakh are sent on 10 January 2026. They remain with the job worker beyond the permitted period without a valid extension and are neither returned nor supplied from the job worker's premises. Section 143(3) deems a supply by the principal to the job worker on 10 January 2026. The company must determine the resulting tax and interest consequences under the applicable provisions.
12. Section 143(4): Deemed Supply of Capital Goods on Delay
For covered capital goods, the equivalent deemed-supply rule operates after the three-year period.
If the capital goods are not returned or supplied from the job worker's place within three years, they are deemed to have been supplied by the principal to the job worker on the day they were originally sent out.
A specialised processing machine is sent to a job worker on 1 July 2026. If it remains outside beyond the permitted three-year period without a valid extension and is neither returned nor supplied from the job worker's premises, Section 143(4) treats the machine as supplied on 1 July 2026.
13. Section 143(5): Waste and Scrap
Waste and scrap generated during job work receives a special treatment.
| Job worker status | Who can supply waste/scrap? |
|---|---|
| Job worker is registered | Job worker may supply waste and scrap directly from his place of business on payment of tax. |
| Job worker is not registered | Principal supplies the waste and scrap. |
A registered machining job worker generates metal scrap while processing the principal's components. If the job worker is registered, Section 143(5) permits the job worker to supply the scrap directly from its premises on payment of GST.
14. Job Work Challan and FORM GST ITC-04
Section 143 establishes the substantive job-work framework, while the CGST Rules prescribe operational documentation.
Rule 45 and challan
Rule 45 requires inputs, semi-finished goods or capital goods sent to a job worker to move under a challan issued by the principal. The challan contains the prescribed Rule 55 details. CBIC's job-work circular also explains the challan mechanism and ITC-04 reporting.
FORM GST ITC-04
Job-work movement details are reported in FORM GST ITC-04 in accordance with the applicable Rule 45 reporting requirements. The exact filing frequency and applicable reporting period should be checked against the rules and notifications applicable to the relevant period.
15. E-Way Bill and Physical Movement
Job-work movement may also involve the e-way bill framework where the prescribed conditions for movement are satisfied. CBIC's job-work circular specifically discusses e-way bill requirements for qualifying consignments and the use of delivery challans.
Typical document chain
- Purchase invoice or principal stock record
- Job-work challan
- E-way bill, where required
- Transport document
- Job-worker receipt
- Processing record
- Return / next-job-worker challan
- Final receipt or supply invoice
16. Detailed Practical Examples
100 steel blanks are sent to a registered CNC job worker. They must be returned or supplied from the job worker's premises within the statutory one-year period, subject to extension rules.
The supplier sends raw material directly to the job worker on the principal's instruction. The principal maintains the credit and movement trail subject to Section 19 and Section 143 conditions.
Forging is done by Job Worker A and machining by Job Worker B. The goods may move directly from A to B with the prescribed challan/document trail.
Finished goods are supplied directly from the job worker's premises to the principal's customer. The principal must check the additional-place-of-business condition and the relevant exception before dispatch.
A machine is sent for specialised coating. The covered capital-goods period is three years, not one year.
Inputs are not returned within one year and no valid extension exists. The law deems a supply on the original dispatch date.
A machine remains with the job worker beyond three years without valid extension. Section 143(4) deems supply from the original dispatch date.
Metal scrap generated during processing is sold by the registered job worker from its premises on payment of GST.
If the job worker is not registered, the principal supplies the waste/scrap under Section 143(5).
10,000 units are sent and 9,850 are returned. The 150-unit difference must be analysed for scrap, process loss, shortages or other approved treatment.
A principal has 50 job workers across India. A location-wise register should track each challan and statutory due date separately.
ERP shows 5,000 units outstanding while ITC-04 shows 4,500. The difference should be investigated before the next filing rather than carried forward indefinitely.
Inputs cannot be returned within one year due to a documented exceptional circumstance. The principal applies for and obtains a Commissioner extension within the statutory framework.
The job worker shifts operations to another location. The principal should verify registration/additional-place-of-business implications and update movement records before continuing dispatches.
17. Finance & GST Compliance Workflow
- Create master job-worker list: GSTIN, legal name, location, nature of process and registration status.
- Capture every dispatch: challan number, date, material code, quantity and value.
- Calculate due date: one year for inputs and three years for covered capital goods.
- Track intermediate movements: principal → job worker 1 → job worker 2 → final return/supply.
- Reconcile physical and ERP balances: identify outstanding quantity, scrap and losses.
- Prepare ITC-04 from the underlying register: not from estimates.
- Review approaching deadlines: create 90/60/30-day alerts for large or critical consignments.
- Check extension requirements: document sufficient cause and obtain the required order where applicable.
- Review direct supplies: confirm additional-place-of-business condition or applicable exception.
- Close the movement: record return, supply, scrap or other legally supported disposition.
18. Recommended Job-Work Register
| Column | Suggested information |
|---|---|
| Serial number | Unique movement ID |
| Principal GSTIN | Registration under which goods are controlled |
| Job worker GSTIN | Registration status and GSTIN |
| Job worker name/location | Legal name and processing site |
| Challan number/date | Movement reference |
| Material code | ERP item code |
| Description | Goods description |
| Quantity sent | Original quantity |
| Value | Book value/assessable reference as applicable |
| Goods type | Input / capital good |
| Dispatch date | Starts statutory clock |
| Due date | 1 year / 3 years |
| Next job worker | If applicable |
| Return date | Final receipt |
| Supply from job worker | Invoice and date if applicable |
| Scrap | Quantity and tax treatment |
| Balance outstanding | Unreturned quantity |
| ITC-04 status | Reported / pending / reconciled |
| Extension | Order details if applicable |
19. Important Distinction: Input vs Capital Goods
| Point | Inputs | Covered capital goods |
|---|---|---|
| Normal period | 1 year | 3 years |
| Late-return consequence | Deemed supplied on dispatch date | Deemed supplied on dispatch date |
| Commissioner extension | Up to additional 1 year | Up to additional 2 years |
| Special exclusions in Section 143(1) | Not applicable | Moulds/dies, jigs/fixtures/tools are specifically excluded from the stated three-year return/supply rule |
20. Common Mistakes
“Job work is a taxable supply.”
The movement of the principal's goods to the job worker under Section 143 is permitted without payment of GST, subject to the procedure. The job worker's own job-work service is separately evaluated as a supply of service.
“The job worker is responsible for the principal's goods ledger.”
Section 143(2) places responsibility for proper accounts of the inputs/capital goods on the principal.
“All goods have a one-year deadline.”
No. Inputs generally have one year; covered capital goods have three years.
“The extension is automatic.”
No. Sufficient cause must be shown and the Commissioner can extend within the statutory maximum.
“Direct dispatch means the principal cannot claim ITC.”
Section 19 specifically addresses ITC for goods sent directly to the job worker, subject to conditions.
“The goods can move to another job worker without records.”
No. The movement chain needs prescribed documentation and reconciliation.
“ITC-04 replaces the job-work register.”
No. ITC-04 is a statutory reporting mechanism; the underlying detailed register remains important for accounting and audit support.
“Scrap can be ignored.”
No. Section 143(5) specifically addresses waste and scrap generated during job work.
“The one-year period starts from invoice date.”
The Section 143 clock is tied to when the inputs were sent out. The register should therefore capture the actual movement date.
21. Section 143 vs Section 141 vs Section 142
| Provision | Main subject | Period |
|---|---|---|
| Section 141 | Historical transition for goods already sent out for job work/processes before GST. | GST transition period. |
| Section 142 | Miscellaneous transition events such as returned goods, refunds, contracts and old demands. | Historical transition. |
| Section 143 | Ongoing GST job-work procedure. | 1 year for inputs; 3 years for covered capital goods, subject to extensions. |
22. Questions People Commonly Search
- What is Section 143 of the CGST Act?
- What is job work under GST?
- Can goods be sent to a job worker without GST?
- What is the one-year limit for inputs under GST job work?
- What is the three-year limit for capital goods under job work?
- Can the job-work period be extended?
- What is ITC-04?
- Is a job-work challan mandatory?
- Can goods be sent directly from supplier to job worker?
- Can one job worker send goods to another job worker?
- Can finished goods be supplied directly from a job worker?
- Who is responsible for job-work records?
- What happens if inputs are not returned within one year?
- What happens if capital goods are not returned within three years?
- Who pays GST on scrap generated during job work?
- Section 143 CGST Act explained with examples
23. Frequently Asked Questions
1. What is Section 143 of the CGST Act?
It provides the GST procedure for sending inputs and capital goods to job workers without payment of tax, subject to prescribed conditions.
2. Is sending goods to a job worker a supply?
The movement under the Section 143 procedure is permitted without payment of GST; the principal retains ownership of the goods. The job worker's processing service is separately considered under GST.
3. How long can inputs remain with a job worker?
Normally one year from the date they are sent out, subject to the statutory extension provision.
4. How long can capital goods remain with a job worker?
Covered capital goods can normally remain for three years from the date sent out, subject to the extension provision.
5. Can the Commissioner extend the one-year period?
Yes, on sufficient cause, by a further period not exceeding one year.
6. Can the Commissioner extend the three-year period?
Yes, on sufficient cause, by a further period not exceeding two years.
7. Who is responsible for maintaining accounts?
The principal is responsible for keeping proper accounts for the inputs and capital goods.
8. Can goods be sent directly from supplier to job worker?
Yes, GST law permits direct dispatch subject to the statutory conditions, and Section 19 addresses ITC in such cases.
9. Can goods move from one job worker to another?
Yes. Section 143 expressly permits subsequent movement to another job worker, subject to prescribed conditions and documentation.
10. Can the principal sell goods directly from the job worker's premises?
Yes, subject to Section 143(1)(b) and the additional-place-of-business requirement or the specified exceptions.
11. What happens if inputs are not returned within one year?
They are deemed to have been supplied by the principal to the job worker on the day they were sent out.
12. What happens if capital goods are not returned within three years?
Covered capital goods are deemed supplied by the principal to the job worker on the day they were sent out.
13. Who can sell scrap generated during job work?
A registered job worker may supply waste and scrap directly from its premises on payment of tax; where the job worker is not registered, the principal supplies it.
14. Is ITC-04 related to Section 143?
Yes. Rule 45 provides the reporting framework for job-work movements and ITC-04 is used for the prescribed details.
15. Is an e-way bill required for job-work movement?
Where the e-way bill rules require it for the movement, the appropriate e-way bill must be generated. Job-work status by itself does not remove every e-way bill requirement.
16. What is the difference between Section 141 and 143?
Section 141 deals with historical pre-GST job-work transition. Section 143 governs job work under the GST regime.
17. Does the one-year clock reset when goods move from Job Worker A to Job Worker B?
The statutory period is linked to the goods being sent out by the principal. Businesses should not assume that an intermediate movement automatically resets the Section 143 clock.
18. What should a company do if its job-work register and ITC-04 do not match?
Reconcile challan-wise, identify missing returns or reporting errors and correct the records/filings using the procedure applicable to the relevant period.
24. Quick Revision – Section 143
- Section 143 = GST job-work procedure.
- Principal may send inputs/capital goods to job workers without payment of GST, subject to conditions.
- Goods can move from one job worker to another.
- Inputs: return/supply within one year.
- Covered capital goods: return/supply within three years.
- Commissioner may extend the input period by up to one year and capital-goods period by up to two years on sufficient cause.
- Principal is responsible for proper accounts.
- Late inputs/capital goods can be deemed supplied from the original dispatch date.
- Direct dispatch to a job worker is permitted subject to conditions and ITC rules.
- Supply from job worker premises generally requires declaration as additional place of business unless an exception applies.
- Waste and scrap have a specific rule under Section 143(5).
- Rule 45 and ITC-04 provide important operational compliance requirements.
25. Legal Disclaimer
This page is provided for general educational and compliance-workflow purposes. GST law, rules, notifications, circulars and judicial interpretation can change. Job-work compliance can also depend on the nature of goods, registration status, movement route, reporting period and applicable notifications. Before taking a tax or accounting decision, verify the law and rules applicable to the relevant period and obtain professional advice where appropriate. This page is not a substitute for professional legal advice.