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Definition · 6 min read

What is ITC-04: Job Work Quarterly Form Explained for Indian Manufacturers

Form ITC-04 is the GST declaration under which a principal manufacturer reports inputs and capital goods sent to a job worker, goods received back, goods sent from one job worker to another, and goods supplied directly from the job worker's premises. It is the audit trail for Section 143 of the CGST Act.

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Published 12 June 2026
Domain expertise
TDS Reconciliation GST Input Credit Platform Settlements NACH Batch Matching Bank Reconciliation Form 26AS Matching ERP Integrations Enterprise Finance Ops
Knowledge Card
Problem

Indian principal manufacturers lose ITC and incur interest because job-work dispatches under Section 143 are not closed within the one-year or three-year statutory window, and the issue surfaces only at the half-yearly ITC-04 filing.

How It's Resolved

Maintain a live challan-level register linking every outbound dispatch to either a return challan, an onward job-work challan, or a supply invoice. Age the open challans against the statutory clock and flag any approaching the limit.

Configuration

Master data flagging input goods versus capital goods, the applicable one-year or three-year clock per challan type, and an alert threshold at 30 days before the deemed-supply date.

Output

A clean ITC-04 statement with all outbound, return, onward, and supply movements reconciled at the challan level, and zero overdue dispatches by the filing date.

Definition

Form ITC-04 is the periodic statement filed by a registered principal manufacturer to declare the movement of inputs, semi-finished goods, and capital goods to and from job workers under the job-work provisions of the GST law. It is prescribed by Rule 45(3) of the CGST Rules and supports Section 143 of the CGST Act.

In one sentence: ITC-04 is the GST form on which a manufacturer accounts for everything sent to a job worker and everything that came back, so that the dispatches do not get deemed as taxable supplies.

Regulatory Reference

ITC-04 is mandated by Rule 45(3) of the CGST Rules, 2017 read with Section 143 of the CGST Act, 2017.

Filing frequency, as notified by the CBIC, is:

  • Half-yearly (for April-September by 25 October; for October-March by 25 April) for principal manufacturers with aggregate turnover above ₹5 crore in the preceding financial year.
  • Annually (by 25 April following the financial year-end) for principal manufacturers with aggregate turnover at or below ₹5 crore.

Section 143 sets the statutory time limits — one year for inputs and three years for capital goods — within which goods sent to a job worker must be received back or supplied directly from the job worker’s premises. The clock is computed from the date of original dispatch as evidenced by the delivery challan.

Why It Matters

Three industries where ITC-04 sits in the middle of daily operations:

Auto-component and engineering. Forgings sent for machining, castings sent for shot-blasting, stampings sent for surface treatment, sub-assemblies sent for painting. A Tier-1 supplier easily issues several thousand job-work challans a month and the ITC-04 register is large.

Textile and apparel. Yarn sent for weaving, fabric sent for dyeing or printing, garments sent for embroidery. Job work is the operational model and a textile principal’s ITC-04 has multi-stage chains where one job worker sends onward to another.

Pharmaceutical contract manufacturing. Active pharmaceutical ingredients sent to a loan-licence manufacturer for formulation. The three-year capital goods clock matters here because moulds and dies are often parked with the contract manufacturer for years.

How to Spot It in Practice

Four operational signals:

  1. Delivery challans under Rule 55 of the CGST Rules with a job-work flag, not tax invoices.
  2. A challan register in the ERP listing dispatch challan, return challan, onward challan, or supply invoice for each row.
  3. An ageing report showing open challans by days outstanding against the one-year or three-year clock.
  4. A half-yearly or annual JSON uploaded to the GST portal with four tables: goods sent, goods received back, goods sent from one job worker to another, and supplies from job worker premises.

Common Misconceptions

  • “ITC-04 only applies to large manufacturers.” It applies to every principal who sends goods on job work, regardless of size. The small-principal concession is annual filing — not exemption.
  • “Once goods are back I do not need to track them.” Wrong. The return event itself is a reportable line. The form aggregates both directions and both must reconcile.
  • “Sending tools or moulds to a vendor is not job work.” Capital goods movement is job work too, with a three-year statutory window instead of one year.
  • “ITC-04 has no link to GSTR-2B.” It is indirect but real — if a job-work dispatch is deemed a supply due to overrun, the deemed supply has to be reported in GSTR-1, and the receiver picks up the corresponding ITC in GSTR-2B.
Primary reference: Central Board of Indirect Taxes and Customs — which prescribes Form ITC-04 under Rule 45(3) of the CGST Rules for reporting job work movements under Section 143.
Related Reading
▸ GSTR-2B reconciliation ▸ what is ITC in GST ▸ auto-component reconciliation

Frequently Asked Questions

Who is required to file Form ITC-04?
Every registered principal manufacturer who sends inputs, semi-finished goods, or capital goods to a job worker under Section 143 of the CGST Act is required to file Form ITC-04. The filing frequency depends on aggregate turnover — half-yearly for principals with turnover above ₹5 crore in the preceding financial year, annually for those at or below ₹5 crore.
What is the time limit for goods to be returned from a job worker?
Inputs must be received back within one year of being sent out, and capital goods within three years. If not returned within this window, the dispatch is deemed a supply on the date the goods were originally sent and tax becomes payable along with interest. ITC-04 is the form on which this deeming consequence is operationally tracked.
What is the difference between ITC-04 and a delivery challan?
A delivery challan under Rule 55 is the document that accompanies the physical movement of goods to or from the job worker. ITC-04 is the periodic statement that aggregates and reports all such challans for a half-year or financial year. The challan is the underlying record; ITC-04 is the summary filed with the GST department.
Does sending goods to a job worker require payment of GST?
No. Movement of inputs or capital goods to a job worker under a delivery challan and within the prescribed time limits is not a supply and no GST is payable on the dispatch. GST applies only if the goods are not returned within the time limit, in which case the original dispatch is deemed a supply on the date of original dispatch.
What is the most common ITC-04 reconciliation error?
Challans where the principal recorded a dispatch but no corresponding return challan or supply challan exists within the time window. These open challans accumulate over quarters and surface only at the time of half-yearly ITC-04 filing, by which time interest has already started running on the deemed supply.

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