What is GST ITC 04 Form?

The Goods and Services Tax (GST) has revolutionized the way businesses operate in India. One of the essential aspects of GST is the Input Tax Credit (ITC) mechanism, which allows businesses to claim a credit for the tax paid on their inputs.

The GST ITC 04 Form plays a crucial role in this process, particularly for manufacturers and job workers. This article will provide an in-depth analysis of the GST ITC 04 Form, its purpose, applicability, and the process of filing it.

Overview of GST ITC 04 Form

The GST ITC 04 Form, also known as the Quarterly Return for Goods Sent to Job Worker, is a document that manufacturers must file to claim the input tax credit on goods purchased and sent to job workers for further processing. The form contains details about the goods sent to job workers, the goods received back from them, and the goods directly sold to customers from the job worker’s premises.

Primary Purpose of GST ITC 04 Form

The primary purpose of the GST ITC 04 Form is to track the movement of goods between the principal manufacturer and the job worker. This form ensures that the input tax credit is claimed only on the actual goods received back from the job worker and prevents any misuse of the input tax credit mechanism.

Applicability of GST ITC 04 Form

The GST ITC 04 Form is applicable to registered manufacturers who send goods for job work. Job work is defined under Section 2(68) of the CGST Act, 2017, as “any treatment or process undertaken by a person on goods belonging to another registered person.” A job worker is the person who performs the treatment or process on the goods.

Important Terms and Concepts Related to GST ITC 04 Form

To understand the GST ITC 04 Form better, it is essential to be familiar with some key terms and concepts related to this form:

Goods Sent for Job Work

Goods sent for job work refers to the inputs or capital goods that the principal manufacturer sends to the job worker for further processing or treatment. These goods can be sent from the principal’s place of business or directly from the supplier’s place of supply.

Goods Received Back from Job Work

Goods received back from job work are the inputs or capital goods that the job worker has processed and returned to the principal manufacturer. The principal can claim the input tax credit on these goods based on the tax paid on the initial purchase.

Directly Sold Goods

Directly sold goods are the inputs or capital goods that are directly sold to customers from the job worker’s premises without returning to the principal manufacturer. The principal must disclose these goods in the GST ITC 04 Form and can claim input tax credit on them.

Also Read: List Of All GST Forms

Conditions for Claiming Input Tax Credit on Goods Sent to Job Worker

There are specific conditions that the principal manufacturer must fulfill to claim the input tax credit on goods sent to a job worker, as per Rule 45 of the CGST Rules:

1. The goods must be sent from the principal’s place of business or the supplier’s place of supply, along with a challan.
2. The goods must be received back within one year for input goods and three years for capital goods. If the goods are not received within this specified time, they will be treated as a supply, and the principal needs to disclose them in GSTR-1. The challan will be treated as a tax invoice, and the principal must pay tax along with interest on such supply from the effective date.

Components of GST ITC 04 Form

The GST ITC 04 Form consists of several components, which include basic details of the manufacturer, details of the inputs or capital goods sent to job workers, and details of the inputs or capital goods received back from job workers.

4.1 Basic Details of the Manufacturer

• GSTIN (Goods and Services Tax Identification Number) of the Principal or registered manufacturer
• Legal name of the manufacturer (as per PAN card)
• Trade name (if any)
• Period (quarter for which the manufacturer is filing the form)

4.2 Details of Inputs or Capital Goods Sent to Job Workers

• GSTIN of the registered job worker or State of the non-registered job worker
• Challan number
• Challan date
• Description of goods sent
• Unique Quantity Code (UQC)
• Quantity
• Taxable value
• Type of goods (Inputs or capital goods)
• Rate of tax (CGST, IGST, SGST/UGST, and cess)

4.3 Details of Inputs or Capital Goods Received from Job Workers

The form is divided into three sections for this component:

• Section A: Details of inputs or goods received back from the job worker to whom the goods were sent for job work
• Section B: Details of inputs or goods received back from the job worker other than the job worker to whom the goods were sent for job work originally
• Section C: Details of the inputs or goods sent to the job worker which were subsequently supplied from the job worker’s premises

Each section requires the following information:

• GSTIN of the registered job worker or State of the non-registered job worker
• Challan number (if applicable)
• Date of Challan issued by the job worker
• Description of goods
• UQC
• Quantity
• Original challan number (if applicable)
• Nature of job done by the job worker
• Losses and wastage (including UQC and quantity of goods)

Filing Frequency and Due Dates for GST ITC 04 Form

The filing frequency and due dates for the GST ITC 04 Form have undergone some changes recently. As of October 1, 2021, the filing frequency and due dates are as follows:

1. Taxpayers with an annual aggregate turnover of more than INR 5 crores in the preceding financial year must file the GST ITC 04 Form once every six months.
2. Taxpayers with an annual aggregate turnover of up to INR 5 crores in the preceding financial year must file the GST ITC 04 Form annually.

Step-by-Step Process for Filing GST ITC 04 Form

Filing the GST ITC 04 Form can be done online through the GST Portal. Follow the steps below to file the form:

1. Visit the GST Portal at www.gst.gov.in.
2. Click on ‘Services’ > ‘Returns’ > ‘ITC Forms.’
3. Click on ‘Prepare Online’ for the GST ITC 04 Form.
4. Select the financial year, period, and search.
5. Fill in the required details in the following tables:
   • Table 4: Goods sent out to job worker
   • Table 5A: Goods received back from the original job worker
   • Table 5B: Goods received back from the subsequent job worker
   • Table 5C: Goods sold directly to customers from the job worker’s premises
6. Save the form and click on ‘File Return.’
7. Select the authorized signatory and file the form using either an Electronic Verification Code (EVC) or a Digital Signature Certificate (DSC).
8. After filing successfully, an Acknowledgement Reference Number (ARN) will be generated.

An offline utility is also available for filing the GST ITC 04 Form. This utility can be used if the number of challans exceeds 500. After adding all the details in the offline utility, a JSON file needs to be uploaded to the GST Portal to proceed with filing.

Penalties and Consequences for Non-Filing or Late Filing

As mentioned earlier, there is no late filing penalty for GST ITC 04 Form at present. However, non-compliance with the filing requirements may lead to future complications or penalties. It is essential to file the return within the stipulated time to claim Input Tax Credit and maintain a compliant status.

Also Read: GST Audit Checklist

Common Mistakes to Avoid While Filing GST ITC 04 Form

Filing the GST ITC 04 Form can be a complex process, and it is essential to avoid some common mistakes to ensure accurate filing:

1. Ensure that the goods sent for job work are accompanied by a challan, as it is a mandatory requirement for claiming input tax credit on these goods.
2. Provide accurate details about the goods sent for job work, the goods received back, and the goods directly sold to customers. Any discrepancies in these details can lead to issues with claiming input tax credit.
3. Keep track of the time limits for receiving goods back from the job worker. If the goods are not received within the specified time, they will be treated as a supply, and the principal must pay tax along with interest on such supply.
4. Ensure that the GST ITC 04 Form is filed within the stipulated due dates to avoid any penalties or late fees.

FAQs

Conclusion

The GST ITC 04 Form is a vital document for manufacturers and job workers, as it helps them claim input tax credit on goods sent for job work. Understanding the purpose, applicability, and filing process of this form is crucial for businesses to ensure compliance with GST regulations and avoid any penalties. With a clear understanding of the GST ITC 04 Form, manufacturers can effectively manage their input tax credit claims and streamline their GST compliance.