GST ITC-04 Return: A Complete Guide

Introduction

The Goods and Services Tax (GST) has been a transformative tax reform in India, streamlining the country’s indirect tax structure. As part of the GST regulation system, businesses can claim Input Tax Credit (ITC) to offset the tax paid on their purchases. The GST ITC-04 return specifically focuses on job workers, who play a critical role in various industries such as textiles, gems and jewelry, and automobile manufacturing. In this article, we will explore the significance of the GST ITC-04 return and its impact on job workers.

What is GST ITC-04 Return?

The GST ITC-04 return is a crucial return that must be filed by principal manufacturers or suppliers to provide details about the goods sent to job workers and received back from them. This return facilitates the proper accounting of goods undergoing further processing or job work. It ensures seamless transactions between the principal and the job worker while maintaining compliance with GST regulations.

Who is Required to File the GST ITC-04 Return?

• The GST ITC-04 return needs to be filed by registered taxpayers who are engaged in manufacturing, trading, or job work activities.
• Taxpayers who send goods for job work or receive goods back from job work are required to file the GST ITC-04 return.
• This return is applicable to taxpayers registered under the Goods and Services Tax (GST) in India.

This return captures essential information such as the goods sent for job work, goods received back after processing, and any cases of shortages or damages that occurred during the process.

Key Information Required in the GST ITC-04 Return

The GST ITC-04 return necessitates the inclusion of the following critical information:

1. Details of Goods Sent for Job Work: This section entails providing descriptions, quantities, and values of the goods dispatched to job workers for processing.

2. Details of Goods Received Back: Here, the return should outline the descriptions, quantities, and values of the goods received from the job workers after processing.

3. Details of Goods Sent Directly from Job Workers: In certain cases, job workers may directly supply the processed goods to customers. This section captures relevant details regarding such supplies made by the job worker.

4. Details of Goods Destroyed or Damaged: If any goods are lost, destroyed, or damaged during the job work process, the GST ITC-04 return must mention these specifics, along with reasons for the loss or damage.

The process to file the GST ITC-04 return involves the following steps:

1. Access the GST Portal: Visit the official GST portal (www.gst.gov.in) and log in using your credentials (GSTIN and password).

2. Navigate to the Returns Dashboard: Once logged in, go to the “Returns” section and click on “Returns Dashboard.”

3. Select the GST ITC-04 Return: From the list of available returns, locate and select the GST ITC-04 return.

4. Fill in the Details: Provide the required details in the return form. This includes information about the goods sent for job work, received from job work, and held in stock on behalf of others. Fill in the quantity and value of goods accurately.

5. Validate and Submit the Return: Validate the return to ensure all the mandatory fields are filled correctly. If any errors or discrepancies are found, rectify them before proceeding. Once validated, submit the return on the GST portal.

6. Confirmation and Acknowledgment: After submitting the return, a confirmation message will be displayed on the portal. A unique acknowledgment number will be generated for future reference.

7. File GSTR-2A Reconciliation: It is advisable to reconcile the data provided in the GST ITC-04 return with the purchase-related details available in GSTR-2A. This helps in identifying any mismatches or discrepancies and rectifying them before the filing due date.

8. Pay Any Applicable Tax: If there is any tax liability or input tax credit (ITC) reversal arising from the GST ITC-04 return, make the payment through the designated mode of payment on the GST portal. Generate the challan and make the payment accordingly.

9. Retain Copies: Keep a copy of the filed return, acknowledgment number, and payment receipt for your records and future reference.

It is essential to file the GST ITC-04 return within the specified due date to comply with GST regulations and avoid penalties. It is recommended to consult with a tax professional or refer to the official GST guidelines for detailed instructions and specific requirements.

Consequences of Non-filing or Incorrect Filing

Non-filing or incorrect filing of the GST ITC-04 return can have adverse consequences for businesses:

1. Penalties and Interest: Failure to file the return or submitting it with incorrect information can attract penalties and interest under the GST laws. These penalties can be substantial and significantly impact a business’s financial health.

2. Loss of Input Tax Credit: Non-filing or incorrect filing may result in the denial of input tax credit claimed on goods sent for job work. This can increase the tax liability for the business and impact its competitiveness in the market.

Conclusion

The GST ITC-04 return plays a vital role in ensuring the smooth functioning of the job work industry. It enables principal manufacturers or suppliers to maintain proper records and claim input tax credits on goods sent for job work. By accurately filing the GST ITC-04 return, businesses can reconcile their input tax credit, comply with GST regulations, and contribute to a transparent and accountable tax system.