To avail of input tax credit, a principal must file ITC 04 return as per GST laws. Read this guide by earlyGST by H&R Block to know how to file ITC 04.

Filing ITC 04 Return

Last Update Date : September 12, 2018

filing itc 04 return

The guide explains the meaning of job work, and the form, ITC 04, that has to be filed for claiming the benefit of ITC on job work.  The guide also explains the step wise procedure for filing the ITC-04 returns online as well as using the offline utility and the various conditions for claiming eligible ITC are also discussed below.

What is Job Work?

Job work refers to the working on the raw material or semi-finished goods supplied by the principal to the other person to complete the whole or part of the product. On completion of the job work the goods are sent back to the principal, the work may involve initial process, intermediate process, assembly, packaging etc. The person who undertakes the job work is referred as job worker.

Input Tax Credit on Job Work

The principal manufacturer can avail the benefit of Input Tax Credit in below two conditions:

  1. Goods purchased and sent to job worker from principal ‘s place of business.
  2. Goods purchased and sent directly to the job worker from the seller without going to the principal first.

Effective Date for Goods Sent

  1. Goods sent from Principal’s place of business- Effective date will be date of goods sent out.
  2. Goods sent directly from the place of supplier- Effective date will be date of goods received by the job worker.

Conditions for Claiming Input Tax Credit on Goods Sent for Job Work

To claim the benefit of ITC on the goods sent for job work, the principal must receive the goods back within the prescribed duration of time mentioned that is 3 years for capital goods and 1 year for input goods.

If the goods are not received within the specified time frame, such goods will be treated as supply from the effective date and tax will be payable thereof and the challan issued will be treated as invoice for such goods.

The specified time duration doesn’t apply to the moulds,jigs, fixtures and the tools and machinery sent to the job worker for carrying out the work.

Books Of Accounts & Challan

The principal should maintain proper books of accounts.

All the goods sent by to Job Worker, should be accompanied by a challan whether sent from principal’s premise or directly from supplier’s premise. The details of goods sent will be shown in GSTR-1.

Form ITC 04

The principal is required to furnish Form ITC-04 every quarter to avail the benefit of ITC on the goods sent for job work. He is required to mention the necessary details like the goods sent to the job worker, goods received back from the job worker or sent from one job worker to another.

Due Date for Filing ITC 04

ITC-04 must be filed every quarter on or before 25th of the succeeding month of the quarter. For example: for the quarter of Jan-Mar the due date will be 25th of April. There is no late fee for non-filing of ITC-04. However, if the manufacturer fails to file the return his ITC will be impacted.

Details to be furnished in ITC 04

The major details to be furnished in ITC-04 are:

  1. Details of goods sent to job worker.
  2. Details of goods received back from the job worker.

ITC-04ITC-04-02
The details pertaining to goods sent or received back by the job worker has to be mentioned here.

Process to File ITC 04

The process for Filing ITC-04 using the GST Portal is mentioned below:

Step 1: Login to the GST Portal 
Step 2: A dashboard will be displayed, click on services >> go on the Returns >> click on ITC Forms
Step 3: Click on Prepare Offline and upload invoices
Step 4: After uploading invoices, click on initiate filing
Step 5: Select the Financial Year and the month for Filing of Return
Step 6: Summary of the fed data will be displayed, recheck the entered taxable amount and other data
Step 7: Proceed to file the Return with DSC or EVC, as applicable

Thus, if the principal wants to avail the benefit of ITC, he must file the form ITC-04 every quarter on or before 25th of the succeeding month of the quarter. Details like the goods sent to the job worker and the details of the goods received back from the job worker must be mentioned while filing the return. The process of filing the return on the GST Portal is given in the guide.

People Also Ask

Q – Who must file ITC-04?

A – The principal is required to furnish Form ITC-04 every quarter to avail the benefit of ITC on the goods sent for job work.

Q – When do we need to file ITC-04?

A – ITC-04 must be filed every quarter on or before 25th of the succeeding month of the quarter.

Q . What are the details that need to be furnished in ITC-04?

A – The below details are required while filing ITC-04:

  1. Details of goods sent to job worker.
  2. Details of goods received back from the job worker.

Q –  What is the prescribed time duration for receiving the goods back by the Principal for claiming the ITC?

A – To claim the benefit of ITC on the goods sent for job work, the principal must receive the goods back within the prescribed duration of time mentioned that is 3 years for capital goods and 1 year for input goods.

Q – What is the late fee for non-filing of ITC-04?

A – There is no late fee for non-filing of ITC-04. However, if the manufacturer fails to file the return his ITC will be impacted.

How earlyGST by H&R Block Can Help You?

Ensure you avail all the ITC benefits available to you by entrusting the filing of all your GST return filing, including ITC 04, with the experts at earlyGST by H&R Block India.

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