Goods Receipt Note Confusion: Do We Need a GRN for Job Work Returns?

Dear sir/madam,

If we send semi-finished goods for job work to undergo a certain process by issuing a work order, should we then raise a Goods Receipt Note (GRN) for those goods received by us at our factory from the job worker?

Yes, you must have a GRN to receive the goods at the factory after job work. Also, the material should be recorded in the inward register maintained at the gate (if any). The GRN is a proof document that the goods have been received back after job work for verification by the excise department.

I can't understand clearly. Suppose we assume that there are 10 processes in the manufacture of "X" item. The first 4 processes take place in our factory. For the 5th process, it steps out from our factory, and the remaining processes (6th to 10th) take place in our factory. My question is, if we send our semifinished "X" item for job work and we receive it after the completion of the 5th process, do we raise a GRN for this?

Somebody told me that "there is no need to raise GRN because it is still in the semifinished stage. If we receive it in the form of the final product, we can raise a GRN." How far is this statement true?

Mr. Swami,

The GRN is a documentary evidence of the receipt of goods in the factory, but I don't know the volume, size of your organization, or the applicability of Central Excise, etc. If the goods are excisable, you are legally required to keep the documentary records of in/out of your materials at any stage.

PK Sharma

The Importance of Raising a Goods Receipt Note (GRN)

Very obviously, you have to raise a GRN for the simple reason that while sending goods out for processing, there are several cases where it is necessary.

Case 1: Stock Reduction

You would have taken out (reduced) from stock. Otherwise, you can't take it out. In this scenario, when it comes back, you have to make a GRN.

Case 2: Rejected Goods

Already rejected goods during inspection need to be sent back to the supplier or someone else. Therefore, upon receipt, you have to make a GRN.

Case 3: Semi-Finished Goods

Semi-finished goods received from X need to be sent for further processing and then received back. Again, you have to make a GRN.

There may be many other cases, but a GRN is a must. It's like accounting for money in the form of material. After the GRN is made, it may get into different stores through IQC depending on your types of processes—like semi-finished goods going directly to the warehouse, for projects, etc.

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