Auto components guide · Updated October 2026
Job Work Under GST for Auto Component Manufacturers (2026)
Under Section 143 of the CGST Act, inputs sent to a job worker must come back, or be supplied from the job worker’s premises, within one year, and capital goods within three years; moulds, dies, jigs, fixtures and tools have no limit. Miss it and the goods are treated as supplied on the day they left.
Who it is for: This guide is for owners, plant heads and accounts teams at Indian auto component manufacturers with roughly ₹10–500 crore annual turnover that send material out for job work.
Disclosure: Bsquare Solutions makes Pothera ERP, one of the options this guide discusses. We compare categories of ERP, not named vendors, and we say plainly where Pothera ERP is not the right fit.
Built by Bsquare Solutions Pvt. Ltd., Noida · part of The Nambiar Group · 25 years in business · 1,000+ manufacturing and trading clients.
Bsquare’s take
“In auto components, job work is not an exception — it is how parts get made. Plating, heat treatment and machining move material in and out every day. The suppliers who stay calm at year-end are the ones who know, at any moment, exactly what is lying at each job worker and for how long.”
The job-work rules at a glance
| Goods sent | Must return or be supplied from job worker within | If not |
|---|---|---|
| Inputs (raw material, castings, forgings, semi-finished parts) | 1 year from the date sent | Deemed supplied by you to the job worker on the date sent — GST payable with interest |
| Capital goods (machines, equipment) | 3 years from the date sent | Deemed supplied on the date sent |
| Moulds, dies, jigs, fixtures, tools | No time limit | — |
ITC-04: what to file and when
| Aggregate turnover (previous year) | Frequency | Due date |
|---|---|---|
| Above ₹5 crore | Half-yearly | 25 October (April–September) and 25 April (October–March) |
| Up to ₹5 crore | Annual | 25 April after the financial year |
Where auto component suppliers lose control of job work
- Many processes, many job workers: Plating, heat treatment, powder coating, machining and forging — each with its own challans.
- Process loss and rejections: Weight lost in machining or plating, and rejected parts, must be reconciled against the challan.
- Partial returns: Parts come back in lots over weeks; the balance at each job worker drifts.
- Direct dispatch: Finished parts shipped to the OEM straight from the job worker still need records.
- Year-end surprises: Material older than one year at a job worker becomes a tax liability.
Free tool: job-work due-date and ITC-04 checker
Check when goods sent to a job worker must come back, and which ITC-04 period the challan falls in. A guide only — confirm with your tax adviser.
How Pothera ERP handles job work
- Job-work challans are raised from the work order, with e-way bills where required.
- Pothera tracks material at each job worker by part, process and challan, including partial returns, process loss and rejections.
- Ageing reports show material approaching the 1-year limit, and the ITC-04 data comes from the same records.
- See how it fits the full auto-component workflow on ERP for auto components.
Frequently asked questions
What is job work under GST?
Job work means processing or working on goods that belong to another registered person, the principal. The principal can send inputs and capital goods to the job worker without paying tax, provided they come back within the time limits in Section 143 of the CGST Act.
What is the time limit for job work under GST?
Inputs must be returned, or supplied from the job worker’s premises, within one year of being sent, and capital goods within three years. Moulds, dies, jigs, fixtures and tools have no time limit. The Commissioner may extend the periods on sufficient cause.
What happens if job-work goods are not returned within one year?
The inputs are treated as supplied by the principal to the job worker on the day they were originally sent, so GST becomes payable on that supply, with interest.
What is ITC-04?
ITC-04 is the GST form in which a principal reports goods sent to and received back from job workers, including goods supplied directly from the job worker’s premises.
What is the due date for ITC-04?
Businesses with aggregate turnover above ₹5 crore in the previous year file half-yearly, by 25 October and 25 April. Others file annually by 25 April after the financial year.
Can finished parts be dispatched directly from the job worker to the customer?
Yes, within the rules for supply from the job worker’s premises; the principal raises the invoice and the movement must be reflected in its records and ITC-04.
How does ERP help with job work?
An ERP raises job-work challans from the work order, tracks material at each job worker including partial returns and process loss, warns before the one-year limit, and produces ITC-04 data from the same transactions.
Sources and methodology
This guide compares categories of ERP, not named products. The criteria come from Bsquare’s own implementations for Indian manufacturers and traders, the questions buyers ask most often in Google India search, and the official GST and MSME rules cited below. Compliance thresholds are taken from the government sources listed; check them against the current notification before you rely on them. Reviewed by the Bsquare implementation team.
- Section 143, CGST Act 2017 — job work procedure (text via KnowYourGST)
- CBIC Circular 38/12/2018-GST — clarifications on job work
- Rule 45(3), CGST Rules — ITC-04 frequency as amended by Notification 35/2021-Central Tax (summary via TaxClue)
- CBIC — GST notifications and circulars (including ITC-04 job-work filing frequency)
- GST e-way bill system (official portal)
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See your job-work balances in the demo
Send us one month of job-work challans. We will show you the balance at each job worker and what is nearing the one-year limit.