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Auto-component principals — Tier-1 and Tier-2 suppliers — dispatch thousands of semi-finished parts every month to job-workers (platers, heat-treaters, machinists, painters, phosphaters), often in multi-hop sequence, on Section 143 delivery challans without GST against a one-year input return clock or three-year capital-goods clock; the quarterly ITC-04 must declare every Table-4 dispatch, every Table-5A return, every Table-5B supply from job-worker premises and every Table-5C inter-job-worker movement, reconcile to the principal's challan register and to GSTR-1, and surface any open balance approaching the statutory window — and a missed return triggers a retrospective deemed supply with 18% interest under Section 50.
Stamp every Section 143 dispatch challan with job-worker GSTIN, process type, input or capital-goods flag, quantity and a one-year (or three-year) clock from the original principal dispatch date; track multi-hop parts on the single original clock across Table-5C inter-job-worker challans; match return GRN to dispatch on quantity within tolerance into Table 5A; flag Table-5B supplies from job-worker premises against GSTR-1; roll opening + dispatched − returned − supplied-from-premises = closing per job-worker per quarter; alert 60 and 30 days before the statutory window; cross-foot ITC-04 to the challan register before filing.
Job-worker master with GSTIN, PAN, process type and Section 393(1)(a) TDS rate; challan series per principal GSTIN under Rule 45; statutory clock per challan (1 year inputs, 3 years capital goods, none for jigs/fixtures/moulds/dies); multi-hop routing map per part; quarter-end / half-year ITC-04 calendar by turnover band; Table-5B linkage to GSTR-1; cross-reconciliation rule to job-worker conversion-charge invoices in GSTR-2B; alert thresholds 60 and 30 days before the window.
A quarter-end ITC-04 pre-filing pack: Table-4 dispatches, Table-5A returns, Table-5B supplies from job-worker premises, Table-5C inter-job-worker movements, opening and closing balances per job-worker, reconciliation to the principal's challan register and to GSTR-1, a deemed-supply risk register listing every open balance within 60 days of the Section 143 window, and the JSON-ready upload file for the GST portal.
The April-to-June ITC-04 deadline lands on 25 July. A Tier-1 brake-component manufacturer in Chennai opens its job-work register that morning to find 6,420 open challans across eleven sub-vendors, 17 of them past the ten-month mark on the original-dispatch clock, three multi-hop parts stuck at hop two with a heat-treater on a discontinued programme. The principal’s GST head has 96 hours to file a clean ITC-04, reconcile it to the challan register and GSTR-1, get the multi-hop chain into Table 5C correctly, and surface the open balances inside the 60-day alert band before the one-year deemed-supply trigger fires under Section 143(3). This is ITC-04 filing auto component India at production scale — and the form is unforgiving on the small things.
Quick reference
| Concept | Provision | Regulator | Filing rule |
|---|---|---|---|
| ITC-04 statement | Section 143 CGST Act + Rule 45 | CBIC / GST portal | Mandatory for every principal with open job-work challans |
| Filing frequency (turnover above ₹5 crore) | Rule 45(3) | CBIC | Quarterly, due 25th of month after quarter-end |
| Filing frequency (turnover up to ₹5 crore) | Rule 45(3) | CBIC | Half-yearly, 25 October and 25 April |
| Input return window | Section 143(1) | CBIC | One year from original dispatch |
| Capital-goods return window | Section 143(1) | CBIC | Three years from original dispatch |
| Jigs / fixtures / moulds / dies | Section 143 first proviso | CBIC | No return clock |
| Deemed supply on missed return | Section 143(3) / 143(4) | CBIC | GST + 18% interest under Section 50 |
| Late fee | Section 47 CGST Act | CBIC | ₹100 + ₹100 per day (CGST + SGST) |
What ITC-04 actually is
ITC-04 is the GST statement through which a registered principal declares all goods that have moved to and from its job-workers in a period under Section 143 of the CGST Act. It is not a tax return — no GST is paid on dispatch or receipt on these challans — but it is the statutory disclosure of the open job-work position. The CBIC uses it to police the one-year and three-year return windows; the supplier uses it as the running ledger that proves no challan has aged into deemed-supply territory.
For auto components the form matters more than in almost any other industry, because the auto reconciliation surface is structurally deep — a single component routinely passes through machining, heat-treatment, plating and painting before it returns to the line, and each leg is a Rule 45 movement that must surface on the return. The general single-hop case is set out in sub-contractor and job-work reconciliation under Section 143; the auto-specific multi-hop pattern is dissected in Tier-2 sub-vendor job-work reconciliation. This article is the operational filing walkthrough.
Who must file and how often
Every registered principal who has dispatched inputs or capital goods on a Section 143 challan in a period must file ITC-04. Frequency is set by Rule 45(3) of the CGST Rules and turns on aggregate turnover:
- Aggregate turnover above ₹5 crore in the preceding financial year: quarterly filing, due by the 25th of the month following the quarter — so 25 July for the April-to-June quarter, 25 October for Jul-Sep, 25 January for Oct-Dec, and 25 April for Jan-Mar.
- Aggregate turnover up to ₹5 crore: half-yearly filing, due 25 October for the April-to-September window and 25 April for the October-to-March window.
The threshold is computed on PAN-level aggregate turnover, so a Tier-1 with multiple GSTINs is normally a quarterly filer. A nil return is required for any period where no challans were issued, if the principal otherwise has the obligation to file.
The four tables, and what each captures
ITC-04’s substantive content sits across four tables. Getting them mapped correctly is the single largest source of post-filing rework.
Table 4 — goods sent to job-worker
Every challan-out movement of the period. The principal records the job-worker’s GSTIN, the challan number and date, a unique job-work number (an internal cross-reference), goods description and HSN, UQC (unit of quantity), quantity, taxable value and tax rate. No GST is paid on dispatch — the value and rate columns exist purely for the statutory record. Each line corresponds to one challan; auto component principals routinely dispatch tens of thousands of challan lines per quarter.
Table 5A — goods received back from job-worker to principal’s premises
Every challan-in movement of the period — the physical return after processing. Links back to the original Table 4 challan via challan number and date. This is the closing leg of the Section 143 cycle.
Table 5B — goods supplied from job-worker’s premises directly to a customer
When the principal invokes the Section 143(1)(b) option to supply from the job-worker’s premises, the goods never come back — they go straight from the job-worker to the customer, on the principal’s tax invoice. Those movements are reported separately because they also appear in the principal’s GSTR-1 as outward supplies. Auto suppliers use this less often than, say, chemicals or textile principals, but Tier-1s with painters or assemblers close to OEM gates do.
Table 5C — goods sent from one job-worker to another
The multi-hop disclosure. When a part moves directly from job-worker X (machinist) to job-worker Y (heat-treater) without coming back to the principal, the inter-job-worker challan is reported in Table 5C. This is where the auto industry’s depth shows: a single forging that goes forge → machine → heat-treat → plate → back to plant generates three Table 5C lines per cycle. Critically, the one-year clock continues to run from the original principal-dispatch date — not from the latest inter-job-worker movement.
Opening and closing balances per job-worker are computed from the four tables and the previous return’s closing position, which is why ITC-04 must be filed in order — a skipped period breaks the running balance.
The multi-hop disclosure rule
The auto-component reality is that very few high-tolerance components pass through only one process. A typical brake-pad shoe travels forging → CNC machining → heat-treatment → zinc-nickel plating → back; a steering knuckle does casting → machining → induction hardening → back; an exhaust mounting bracket does pressing → painting → back. Section 143 explicitly permits this multi-hop chain — the goods need not first return to the principal between hops — but it imposes two disciplines:
- Every inter-job-worker movement is its own challan under Rule 45, and must be issued by the current holding job-worker to the next job-worker, with the principal as consignor on record.
- The original-dispatch clock keeps running: a part that has spent four months at the machinist, three months at the heat-treater, and is now at the plater has only five months of headroom left on Section 143’s one-year window, regardless of how recently it arrived at the plater.
A reconciliation system that resets the clock at each Table 5C movement under-reports deemed-supply risk and is the single most common cause of audit-time exposure in auto Tier-1s.
Challan numbering convention
Rule 45 requires every job-work delivery challan to carry a serial number unique within the financial year, the principal’s GSTIN, the job-worker’s GSTIN, goods description, HSN, quantity, taxable value and tax rate (even though no GST is paid). Most Tier-1 ERPs use a structured series, for example JW/2026-27/PUNE/00001 — Job-Work / FY / plant location / running counter. The same numbering must flow into Table 4 verbatim; mismatches between the printed challan and the ITC-04 entry are the most common GST-audit query under Section 65.
The same series carries through Table 5A on the return leg, and a corresponding inter-job-worker series (often prefixed JWX) carries through Table 5C for multi-hop legs.
ITC-04 vs GSTR-1: where they touch
ITC-04 reports only non-supply movement of goods. GSTR-1 reports outward supplies. They intersect on two flows, and both must reconcile to the same underlying data:
- Supplies from job-worker premises (Section 143(1)(b)) appear as outward supplies in the principal’s GSTR-1 (the principal raises the tax invoice on the OEM, even though the physical goods ship from the job-worker’s gate) and as Table 5B in ITC-04 — the quantities and the customer GSTIN must agree across both returns.
- Conversion-charge invoices from the job-worker (HSN 9988, taxable service) appear in the job-worker’s GSTR-1 and in the principal’s GSTR-2B for ITC. ITC-04 itself does not capture the conversion charge — but a clean ITC-04 reconciliation is also the cleanest defence of the GSTR-2B ITC on those invoices.
A break between any of these legs and the principal’s job-work register is the trigger for a deeper audit pass before filing.
Three-way matching for ITC-04 reconciliation
See how challan-out, return GRN and the conversion invoice tie together before the ITC-04 deadline — and where Table 4/5A/5C breaks hide.
Open the three-way match exception calculator →Step-by-step on the GST portal
The portal flow is consistent across quarters; the rework happens upstream of the upload. Walked end-to-end:
Step 1 — log in and select Returns Dashboard. Pick the financial year and the period (Q1 / Q2 / Q3 / Q4 for quarterly filers; H1 / H2 for half-yearly). The ITC-04 tile sits on the dashboard alongside GSTR-1 and GSTR-3B.
Step 2 — choose the data-entry method. For low volumes (under 100-200 challans in the period) direct online entry works. For a Tier-1 with thousands of challan lines, the JSON offline utility is the only realistic option: download the utility, populate Tables 4, 5A, 5B and 5C in the prescribed Excel template, and generate the JSON.
Step 3 — populate Table 4. One line per dispatch challan. Job-worker GSTIN; unique job-work number (the internal cross-reference); challan number and date as issued; goods description; HSN at the level configured for the principal (4-digit if turnover ≤ ₹5 crore, 6-digit above); UQC; quantity; taxable value; tax rate. Any line with a missing GSTIN — common for unregistered platers or small machinists under the threshold — uses URP in the GSTIN column.
Step 4 — populate Table 5A. One line per return-leg challan back to the principal. The crucial field is the original challan reference — challan number and date as issued by the principal in Table 4 of some return (this quarter or a prior one). A Table 5A line with no matching prior Table 4 entry is the most common upload-time rejection.
Step 5 — populate Table 5B. Only if Section 143(1)(b) is invoked. The customer’s GSTIN, the principal’s invoice number and date, the underlying job-worker challan, HSN, quantity and value. Cross-check against GSTR-1 Table 4A.
Step 6 — populate Table 5C. One line per inter-job-worker movement. The original principal challan (the one that started the clock), the inter-job-worker challan number and date, the sending and receiving job-worker GSTINs. Auto principals running multi-hop routes routinely generate several thousand Table 5C lines per quarter.
Step 7 — generate and upload the JSON. The offline utility validates the file structure before generation; common pre-upload failures are bad GSTINs, HSN format mismatches, or Table 5A references that don’t tie back to a prior Table 4. Upload the JSON; the portal will run server-side validation and surface any remaining errors.
Step 8 — preview the summary. The portal computes opening balance per job-worker (from the prior return), adds Table 4 dispatches, subtracts Table 5A returns and Table 5B supplies, and shows the closing balance. The reviewer’s check is that the closing balance per job-worker equals the principal’s job-work register at the period end.
Step 9 — file with DSC or EVC. ITC-04 has no tax payment leg, so the file action is direct. The portal returns an ARN and the return moves to “Filed” status; the closing balance becomes the next period’s opening.
A late or skipped period is recoverable, but it breaks the running balance and triggers a manual reconciliation in the next filing — far more work than getting one quarter right.
Tax overlay — Section 393(1)(a) on the conversion charge
ITC-04 captures the goods movement but not the conversion-charge invoice. That invoice carries its own tax legs that must reconcile in parallel:
- GST on the conversion service at 18% under HSN 9988 — the job-worker’s outward supply, the principal’s ITC in GSTR-2B.
- TDS under Section 393(1)(a) of the Income Tax Act 2025, payment code 1002 — replacing legacy Section 194C from 1 April 2026. 1% for individual/HUF job-workers and 2% for company/firm job-workers, applied to the conversion charge only (not the value of the input goods, which the principal already owns). Threshold ₹30,000 per single contract or ₹1,00,000 aggregate per job-worker per financial year. The full payment-code framework is set out in TDS payment codes 1001–1092 and the wider statutory shift in Section 393 TDS under the new Income Tax Act.
- Cross-era handling for Q4 FY 2025-26 — invoices and Form 26AS entries before 1 April 2026 carry the legacy 194C reference; the reconciliation must keep the cross-reference live through the next full year cycle so historical entries still tie out.
For scrap that is generated at the job-worker and disposed of from the job-worker’s premises, the Section 394 scrap TCS reconciliation at payment code 1071 sits on top.
Worked example — Tier-1 with 5,000 components/month across 3 job-workers
A Chennai brake-component Tier-1 produces 5,000 finished brake-pad shoes per month, routed forge → CNC machine → heat-treat → plate → back. The forge sits onsite; the three downstream operations sit with three job-workers — Plant M (a company-tier machinist in Hosur), Plant H (a company-tier heat-treater in Bommasandra), and Plant P (an individual proprietor plater in Peenya). One quarter’s flow, in summary form:
- Dispatched from principal to Plant M (Table 4): 15,000 forged blanks on 124 challans (3 × monthly batches)
- Plant M → Plant H (Table 5C): 14,910 machined parts on 119 challans — 90 rejected at first-operation tolerance
- Plant H → Plant P (Table 5C): 14,860 heat-treated parts on 116 challans — 50 cracked in quench
- Plant P → principal (Table 5A): 14,825 plated parts on 114 challans — 35 rejected at plating
- Conversion invoices: machining at ₹38/part (Plant M, company, 2% TDS); heat-treatment at ₹22/part (Plant H, company, 2% TDS); plating at ₹14/part (Plant P, individual proprietor, 1% TDS).
Cross-foot check at quarter-end: 15,000 Table 4 in − 14,825 Table 5A out = 175 open at quarter-close, distributed across the three job-workers’ WIP positions. The opening balance was zero (clean prior quarter), so closing per principal-register is 175 parts — split 60 at machining (queued for the next heat-treatment batch), 55 at heat treatment, 60 at plating. All within the one-year window (oldest open dispatch is ten weeks).
The four-way control per leg ties the principal’s challan series, the inter-job-worker challan series, the Table 5A return, and each job-worker’s conversion-charge invoice. Machining: 15,000 × ₹38 = ₹5.70 lakh, Section 393(1)(a) TDS at 2% = ₹11,400. Heat-treatment: 14,910 × ₹22 = ₹3.28 lakh, TDS = ₹6,560. Plating: 14,860 × ₹14 = ₹2.08 lakh, TDS at 1% = ₹2,080. The ITC-04 upload pack: 124 Table 4 lines, 114 Table 5A lines, 235 Table 5C lines (the two inter-job-worker legs), zero Table 5B. Pre-filing alert: two legacy parts on a discontinued programme batch still open at Plant H past ten months on the original-dispatch clock — expedited for return before the one-year line.
Late filing and the deemed-supply trap
The bare late fee is small — ₹100 per day under each Act, capped — but the structural risk dwarfs it. A delayed or skipped ITC-04 means the principal cannot, in audit, point to a filed return as evidence that an open challan was within the one-year or three-year window. The Section 143(3)/(4) deemed-supply finding is then materially harder to rebut, the original dispatch is treated as a supply on the dispatch date, and GST plus interest at 18% per annum under Section 50 runs from that date — easily a six- or seven-figure exposure on a single multi-month-old challan series.
The defensive posture for any auto-component principal is therefore: file every period on time, even if the running balance is uncomfortable; reconcile to the challan register before upload; surface every open balance approaching 60 days of the statutory window as a board-visible risk.
How ITC-04 ties into the wider auto stack
ITC-04 sits inside the automotive component manufacturing reconciliation sub-pillar and the broader manufacturing pillar. The multi-hop chain it documents is the same one dissected in Tier-2 sub-vendor job-work reconciliation; the statutory frame is the same as in sub-contractor and job-work reconciliation under Section 143. For the form, the schema and the offline utility, the GST portal is the authoritative source.
What automated reconciliation changes
Manual ITC-04 preparation on thousands of multi-hop challans is where deemed-supply exposures hide until the quarter-end fire drill — or worse, until an audit. Purpose-built reconciliation software India ties every challan to its original-dispatch clock across hops, runs the Table 4 / 5A / 5B / 5C cross-foot before upload, reconciles to GSTR-1 and to the conversion-charge invoices in GSTR-2B, and alerts 60 and 30 days before any Section 143 window. TransactIG carries 24+ industry presets including a configuration for multi-hop Section 143 job-work and ITC-04 reconciliation. Customer outcomes include match-rate improvement from 51% to 88%. Build is two-to-four weeks on AWS Mumbai (ISO 27001:2022). For the inbound match discipline see three-way matching software India.