Job Work is the process where a manufacturer (principal) sends raw material or semi-finished goods to a third party (job worker) for processing operations like heat treatment, plating, machining, or assembly, and then receives the processed material back.
Why It Matters
Almost every Indian manufacturing MSME uses job work, whether for plating, anodising, heat treatment, CNC machining, or assembly. GST law treats job work as a supply of services, and strict documentation (challan, ITC-04 return, 1 or 3 year return window) is required to preserve input tax credit. Sloppy job work tracking leads to GST notices and disputes.
Example with Indian Context
An auto parts maker in Gurgaon sends 500 forged steel bars to a heat treatment vendor in Ghaziabad under a job work challan. The vendor has 1 year (for inputs) or 3 years (for capital goods) to return the processed material. Each challan is tracked, and the aggregate is reported quarterly in ITC-04. If material is not returned in time, the principal must pay GST as if it were a regular supply.
Related Terms
How ERPDrive Handles It
ERPDrive has a native job work module. It issues GST-compliant job work challans, tracks material sent, received, scrap, and ageing, generates e-way bills, and exports ITC-04 data straight from the job work ledger. Alerts flag challans nearing the 1 or 3 year limit.
See It in Your Factory
ERPDrive handles Job Work as a first-class workflow alongside BOM, MRP, quality, and GST. Book a 30-minute demo.
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