The short answer
Job work management in an ERP records material sent to a job worker against a delivery challan, tracks the pending quantity with each job worker, and receives processed goods back into stock—giving you accurate inventory and the records you need for GST, including ITC-04.
What is job work?
Job work is when a manufacturer (the principal) sends its own material to another business (the job worker) for a process—stitching, dyeing, machining, plating, heat treatment, painting, fabrication—and receives the processed goods back. Ownership stays with the principal throughout.
It is common in Indian manufacturing, especially in garments and textiles, and it is also where stock most often goes missing from view: material leaves the plant but must still be counted as yours.
GST rules to keep in mind
- Delivery challan, not invoice. Material sent for job work moves under a delivery challan, without paying GST at the time of sending.
- Time limits. Inputs should come back within 1 year and capital goods within 3 years; otherwise the original dispatch is treated as a supply from the day it was sent. Moulds, dies, jigs, fixtures and tools are excluded from the limit.
- ITC-04. Principals report goods sent to and received from job workers in Form ITC-04—half-yearly if turnover exceeds ₹5 crore, annually otherwise.
- E-way bills. Needed for job work movements above the e-way bill limit, and for any inter-state movement to a job worker regardless of value.
A general overview as of the date above, not tax advice. Confirm current rules on the GST portal or with your chartered accountant.
How job work works in an ERP
- Create the job work order. Choose the job worker, the process, the material to send and the goods expected back.
- Issue against a challan. Stock moves from your store to a “with job worker” location; the challan and e-way bill are produced.
- Track pending material. See, per job worker, what was sent, what has returned and what is still out—and for how long.
- Receive processed goods. Record receipt, scrap and quality results; stock moves back into your store.
- Close and report. Completed orders are closed and the sent/received records are ready for ITC-04.
What you gain
- Stock figures that include material with job workers—no separate register or spreadsheet.
- Visibility of material nearing GST time limits before it becomes a tax liability.
- Clear job worker performance: turnaround time, scrap and rework.
- Accurate job-work costs in the cost of every product.
- ITC-04 and audit records produced from transactions, not reconstructed at year-end.
Kriyex ERP tracks external job work and contractors alongside production and inventory, and follows each batch across departments and job workers.