{"id":14235,"date":"2024-08-28T22:04:09","date_gmt":"2024-08-28T16:34:09","guid":{"rendered":"https:\/\/piceapp.com\/blogs\/?p=14235"},"modified":"2024-08-28T22:04:09","modified_gmt":"2024-08-28T16:34:09","slug":"gst-itc-04","status":"publish","type":"post","link":"https:\/\/piceapp.com\/blogs\/gst-itc-04\/","title":{"rendered":"A Comprehensive Guide on Input Tax Credit 04 Filing"},"content":{"rendered":"\n<div class=\"wp-block-group has-background\" style=\"background-color:#f2f5f9\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n<h3 class=\"wp-block-heading\">Key Takeaways<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Job work involves the principal manufacturer sending goods to another registered person for further processing, defined under Section 2(68) of the CGST Act 2017.<\/li>\n\n\n\n<li>Principal manufacturers can claim input tax credit on goods sent for job work, provided they meet specific time limits for receiving the goods back.<\/li>\n\n\n\n<li>MSMEs with an annual turnover up to \u20b95 crore file ITC-04 annually, while those exceeding \u20b95 crore file it half-yearly.<\/li>\n\n\n\n<li>Non-compliance with ITC-04 filing can result in penalties up to \u20b925,000 under Section 125 of the GST Act.<\/li>\n\n\n\n<li>Timely filing ensures GST compliance, enables claiming input tax credits, and improves supply chain efficiency for MSMEs.<\/li>\n<\/ul>\n<\/div><\/div>\n\n\n\n<p>The <strong>GST ITC-04<\/strong> form is crucial for Micro, Small and Medium Enterprises (MSMEs), prioritising job work. This blog elaborates on what is job work, claiming input tax credit on job work, its time limit and <a href=\"https:\/\/dictionary.cambridge.org\/dictionary\/english\/consequence\" target=\"_blank\" rel=\"noopener\">consequences<\/a> for delays. Further, learn about the steps to file the ITC-04 form to experience a hassle-free filing journey.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Understanding Job Work<\/strong><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/piceapp.com\/blogs\/wp-content\/uploads\/2024\/07\/CGST-Act-2017-1-1024x576.png\" alt=\"CGST Act 2017\" class=\"wp-image-14237\" title=\"\" srcset=\"https:\/\/piceapp.com\/blogs\/wp-content\/uploads\/2024\/07\/CGST-Act-2017-1-1024x576.png 1024w, https:\/\/piceapp.com\/blogs\/wp-content\/uploads\/2024\/07\/CGST-Act-2017-1-300x169.png 300w, https:\/\/piceapp.com\/blogs\/wp-content\/uploads\/2024\/07\/CGST-Act-2017-1-768x432.png 768w, https:\/\/piceapp.com\/blogs\/wp-content\/uploads\/2024\/07\/CGST-Act-2017-1-1536x864.png 1536w, https:\/\/piceapp.com\/blogs\/wp-content\/uploads\/2024\/07\/CGST-Act-2017-1.png 900w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption><\/figcaption><\/figure>\n\n\n\n<p>The Section 2(68) of the Central Goods and Service Tax or CGST Act 2017 defines job work as undertaking treatment or process by a person for goods belonging to another registered person.<\/p>\n\n\n\n<p>In other words, job work is a process wherein the principal manufacturer sends raw materials, inputs or semi-finished goods to a worker to process them further. For instance, a large shoe manufacturer sends inputs like half-made shoes to smaller manufacturers to attach the soles and complete the product. This process is known as job work.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Claiming Input Tax Credit on Job Work<\/strong><\/h2>\n\n\n\n<p>The principal manufacturer can take credit for tax paid on purchased goods sent to smaller manufacturers as job work. However, there are certain specifications pertaining to time limit, direct sales and machinery. The specifications are discussed below.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Time Limit for Receiving Goods Back by Principal Manufacturer<\/strong><\/h3>\n\n\n\n<p>The principal manufacturer needs to receive back goods within the following time limit:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Capital goods: 3 years from the effective date<\/li>\n\n\n\n<li>Input Goods: 1 year from the effective date<\/li>\n<\/ul>\n\n\n\n<p>Notably, the effective date refers to the date on which the principal manufacturer sends goods to the job worker and the date when the job worker receives the goods. Further, the rule does not apply to <a href=\"https:\/\/www.ncdhd.org\/what-are-molds#:~:text=Molds%20are%20microscopic%20fungi%20that,down%20and%20digesting%20organic%20material.\" target=\"_blank\" rel=\"noopener\">moulds<\/a>, dies, jigs and fixtures that the manufacturer sends to the job worker.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Consequences of Not Receiving Goods Within The Specified Time<\/strong><\/h3>\n\n\n\n<p>There can be instances when the job worker does not receive goods within the specified time limit. In such a case, the goods will be treated as supply from the effective date. The principal manufacturer further has to pay taxes on the supply and the challan will be treated as a supply invoice.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Direct Sales from Job Worker&#8217;s Location by Principal<\/strong><\/h3>\n\n\n\n<p>The principal manufacturer can directly sell from the job worker\u2019s location if the principal manufacturer declares the job worker\u2019s place as an additional place of business. However, the rule does not apply in the following conditions:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>If the job worker is registered<\/li>\n\n\n\n<li>When the principal manufacturer supplies goods, specifically mentioned by the Commissioner and allows for direct sales from the <a href=\"https:\/\/dictionary.cambridge.org\/dictionary\/english\/premises\" target=\"_blank\" rel=\"noopener\">premises<\/a> of job worker\u2019s business<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Machinery Sent to Job Worker for Job Work<\/strong><\/h3>\n\n\n\n<p>The time limit rule to send goods does not apply to machinery such as fixtures or tools, jigs, moulds and dies that the principal manufacturer sends to the job worker to proceed with the job work.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Form ITC-04 Overview<\/strong><\/h2>\n\n\n\n<p>The Form ITC-04 is often referred to as the &#8216;goods sent to job work and received back&#8217; form. This is a form used by MSMEs to file returns periodically. The form includes information about goods movement to job workers from the principal manufacturer and receiving back of the goods.<\/p>\n\n\n\n<p>MSMEs need to file the return on a half-yearly or annual basis based on the turnover limit. The Form ITC-04 helps these enterprises track the goods sent and received within the effective date from and to the principal manufacturers.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"WHAT IS ITC - 04 FORM IN GST? HOW TO FILE ITC-04 FORM?\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/kFllZKhpejI?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Steps to File ITC-04 on The GST Portal<\/strong><\/h2>\n\n\n\n<p>You can file <strong>GST ITC-04<\/strong> online or offline based on your convenience. Here is the online and offline filing process in detail:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Online Filing of GST ITC-04<\/strong><\/h3>\n\n\n\n<p>Here are the steps to file GST ITC-04 online:<\/p>\n\n\n\n<p><strong>Step 1:<\/strong> Visit the official GST portal and log in using your user credentials.<\/p>\n\n\n\n<p><strong>Step 2: <\/strong>Navigate to the \u2018Services\u2019 section and select \u2018Returns\u2019 and then \u2018ITC Forms\u2019.<\/p>\n\n\n\n<p><strong>Step 3: <\/strong>Select \u2018GST ITC-04\u2019 and then \u2018Prepare Online\u2019.<\/p>\n\n\n\n<p><strong>Step 4: <\/strong>Select the financial year and the period for filing returns from the drop-down menu and click &#8216;Search&#8217;.<\/p>\n\n\n\n<p><strong>Step 5: <\/strong>Enter the information in tables for details of inputs and then click &#8216;Save&#8217; followed by &#8216;File Return&#8217;.<\/p>\n\n\n\n<p><strong>Step 6: <\/strong>As a taxpayer, you can use OTP or digital signature to verify the form and complete the return filing process.<\/p>\n\n\n\n<p class=\"has-ast-global-color-4-background-color has-background\">\ud83d\udca1 If you want to pay your GST with Credit Card, then download\u00a0<a href=\"https:\/\/play.google.com\/store\/apps\/details?id=one.pice.pice_business_loan&amp;_branch_match_id=1260478299341712556&amp;utm_source=website&amp;utm_campaign=homepage&amp;utm_medium=website&amp;_branch_referrer=H4sIAAAAAAAAA8soKSkottLXz8wryyxJ1SvITE5NLCjQS87P1S9PTcrIz00FAMR0ueciAAAA\" target=\"_blank\" rel=\"noreferrer noopener\">Pice Business Payment App<\/a>. Pice is the one stop app for all paying all your business expenses.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Offline Filing of GST ITC-04<\/strong><\/h3>\n\n\n\n<p>The steps below highlight the offline return filing process for <strong>GST ITC-04<\/strong>:<\/p>\n\n\n\n<p><strong>Step 1:<\/strong> The first two steps are the same as the online process.<\/p>\n\n\n\n<p><strong>Step 2: <\/strong>Select \u2018Prepare Offline\u2019 under \u2018<strong>GST ITC-04<\/strong>\u2019.<\/p>\n\n\n\n<p><strong>Step 3: <\/strong>Browse the invoice to upload and then click &#8216;Start Filing&#8217;.<\/p>\n\n\n\n<p><strong>Step 4:<\/strong> Select the tax period or filing period, verify the information and the amount taxable and create OTP.<\/p>\n\n\n\n<p><strong>Step 5: <\/strong>Check the return and validate the digital signature to complete the process.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Turnover Limit and Exemptions for ITC-04<\/strong><\/h2>\n\n\n\n<p>The turnover limit for GST ITC-04 filing is \u20b95 crore. Until 2021, taxpayers had to file the ITC-04 quarterly form. However, after revision, the following are the filing frequency and dates for ITC-04:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Taxpayers having an annual aggregate turnover not exceeding \u20b95 crore have to file ITC-04 yearly for the previous financial year within 25th April of the next financial year. For instance, the due date for filing ITC-04 for 2023-2024 is 25th April 2024.<\/li>\n\n\n\n<li>MSMEs having an annual aggregate turnover over \u20b95 crore need to file ITC-04 half-yearly. The due date for April to September is 25th October of the same financial year and it is 25th April of the next financial year for October to March of the previous financial year. For instance, the due dates will be 25th October 2023 and 25th April 2024 for the year 2023-2024.<\/li>\n<\/ul>\n\n\n\n<p>There is no exemption for filing ITC-04. However, if the goods that you send for job work are used for exempt or non-taxable supplies, ITC-04 may be partially or fully restricted.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Advantages of Filing ITC-04<\/strong><\/h2>\n\n\n\n<p>There are several benefits of filing ITC-04 filing for MSMEs. Here are the benefits that you can reap as an MSME:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Compliance: <\/strong>Filing ITC-04ensures compliance with GST regulations with accurate tracking of the movement of goods from the principal manufacturer to the job worker and back.<\/li>\n\n\n\n<li><strong>Input Tax Credit: <\/strong>Filing ITC-04 helps MSMEs claim the input tax credit on goods sent to job workers, thereby reducing their tax liabilities.<\/li>\n\n\n\n<li><strong>Supply Chain Efficiency: <\/strong>Filing ITC-04 allows effective tracking of the movement of goods. As a result, it helps align the supply chain and improve production efficiency followed by reducing bottlenecks.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Penalties for ITC-04 Non-compliance<\/strong><\/h2>\n\n\n\n<p>Under Section 125 of the GST Act, the GST authorities levy a penalty of up to \u20b925,000 for non-compliance with the Act and non-filing of ITC-04. However, there are no late fees or penalties described for delay in filing ITC-04.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Consequences of Not Filing Form GST ITC-04<\/strong><\/h2>\n\n\n\n<p>If an MSME does not file <strong>GST ITC-04<\/strong>, it may face a penalty of up to \u20b925,000. In addition, the GST authorities may take actions pertaining to tax payment demand, charging interest or cancelling a taxpayer\u2019s GST registration. To avoid such consequences, it is advisable that taxpayers file ITC-04 on a quarterly basis.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>The Bottom Line<\/strong><\/h2>\n\n\n\n<p>As you know the consequences of not filing the<strong> GST ITC-04 <\/strong>form, ensure you file it within the time period to avoid the adverse consequences. Further, as an MSME, you can reap the benefits of input tax credit, GST regulation compliance and supply chain efficiency by filing the ITC-04 form within the time limit.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">FAQs<\/h3>\n\n\n<div id=\"rank-math-faq\" class=\"rank-math-block\">\n<div class=\"rank-math-list \">\n<div id=\"faq-question-1721726686899\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>What is ITC 04 in GST?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>ITC-04 is a form used by principal manufacturers to report the movement of goods sent to job workers and received back. It helps in claiming the input tax credit for the goods sent for job work under the GST regime.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1721726703129\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>What happens if ITC 04 is not filed?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>If ITC-04 is not filed, the principal manufacturer may face penalties up to \u20b925,000 under Section 125 of the GST Act. Additionally, the GST authorities might take further actions such as tax payment demands, charging interest, or even canceling the GST registration of the taxpayer.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1721726842189\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>Can we file ITC 04 as nil?<\/strong> <\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Yes, ITC-04 can be filed as a nil return if there were no transactions of goods sent to or received from job workers during the filing period.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1721726851353\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>Is nil GST return mandatory?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Yes, filing a nil GST return is mandatory if there are no transactions during the tax period. This ensures compliance with GST regulations and avoids penalties.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1721726864688\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>How to file ITC 04 offline?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>To file ITC-04 offline, follow these steps:<\/p>\n<p>1. Log in to the GST portal and navigate to \u2018Services\u2019 &gt; \u2018Returns\u2019 &gt; \u2018ITC Forms\u2019.<br \/>2. Select \u2018Prepare Offline\u2019 under \u2018GST ITC-04\u2019.<br \/>3. Browse and upload the invoice file.<br \/>4. Select the tax period, verify the information, create OTP, and validate with a digital signature to complete the filing process.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1721726908765\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>What happens if I forgot to claim ITC?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>If you forget to claim ITC within the prescribed time limit (usually by the due date for filing the return for September of the following financial year or annual return, whichever is earlier), you may lose the eligibility to claim it. This will result in higher tax liabilities.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1721726922945\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>How do I file a zero GST return online?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>To file a zero GST return online:<\/p>\n<p>1. Log in to the GST portal using your credentials.<br \/>2. Navigate to \u2018Services\u2019 &gt; \u2018Returns\u2019 &gt; \u2018Returns Dashboard\u2019.<br \/>3. Select the return filing period and choose the appropriate return form (GSTR-3B, GSTR-1, etc.).<br \/>4. Enter zero values in all required fields.<br \/>5. Save and submit the form, then verify using OTP or digital signature to complete the filing process.<\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>Key Takeaways The GST ITC-04 form is crucial for Micro, Small and Medium Enterprises (MSMEs), prioritising job work. This blog elaborates on what is job work, claiming input tax credit on job work, its time limit and consequences for delays. Further, learn about the steps to file the ITC-04 form to experience a hassle-free filing [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":14239,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-14235","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gst"],"_links":{"self":[{"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/posts\/14235","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/comments?post=14235"}],"version-history":[{"count":0,"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/posts\/14235\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/media\/14239"}],"wp:attachment":[{"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/media?parent=14235"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/categories?post=14235"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/tags?post=14235"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}