Do Unregistered Job Workers Need Tax Registration? Seeking Advice on Sending Raw Materials

Subject: Information Requested About Sending Raw Materials to Job Workers

With reference to the above, we are a registered dealer with the Aminjikarai Assessment Circle, having TIN 33251023498 and CST 814631/05.08.2002, and we are engaged in the leather goods export business. We have branches/factories registered with the department in five different locations for manufacturing leather goods.

We are also sending leather/accessories (including all materials for making) to some job work parties within Tamil Nadu, as mentioned in the Delivery Challan & Form JJ, solely for job work purposes. We receive them back from the job workers as finished goods. Some of the small job work vendors are not registered with the Commercial Tax Department as dealers.

Further, I request you to kindly provide details about whether the job work vendors need to register with the Commercial Tax Department or not. Additionally, please advise on the documents we need to send along with the materials when sending raw materials to the unregistered job workers.

Thanking you,

Yours faithfully,

(G. SUNDARESAN)
Manager – Accounts
[Phone Number Removed For Privacy Reasons]
E-Mail: [Email Removed For Privacy Reasons]
Regards

Dear Mr. G. Sundaresan, This query should have been raised at the CiteFin Finance Management Community Knowledgebase and not on this forum! When you send the material for job work, your vendor adds value to it and returns it to you. To add value, the vendor further adds his own material or processes the material provided to him. Therefore, for the material that is added by him, he will add VAT, and for the services that he has rendered, he will raise Service Tax. This is my general understanding.

Thanks,

Dinesh Divekar