What Is ITC-04 and Who Needs to Report It?
Updated
Short answer
ITC-04 is the GST statement of goods a business has sent to job workers and received back from them. It is reported by the registered person who sends the goods, known as the principal. To prepare it you need a clear record of what was sent, to whom, what came back, and what is still with the job worker. The filing frequency and due dates are set by notification, so confirm the current ones with your CA.
What ITC-04 is
When you send goods to another person for processing, such as cutting, packing, finishing or treatment, and then take them back, GST treats the movement as job work. ITC-04 is the statement in which the principal reports the goods sent out and the goods received back or otherwise accounted for, so the movement can be reconciled. It is a record of quantities and movements, and it sits alongside your normal GST returns rather than replacing them.
Who needs to report it
The principal, meaning the registered person who sends goods to a job worker, reports ITC-04. That is not limited to businesses that make things. A distributor who sends goods out for cutting, repacking or finishing before selling them can be a principal too. If you send goods out and take them back, ask your CA whether ITC-04 applies to you and how often.
What the statement records
The information behind ITC-04 is the movement of goods, item by item.
- The job worker’s details, including their GSTIN and state
- The challan under which goods were sent, with date, product, HSN code and quantity
- What came back from the job worker, and when
- Goods transferred from one job worker to another, and any losses or waste
- What is still pending with the job worker
The time limits that matter
GST sets time limits for the return of goods sent for job work. As a general rule, inputs are expected back within one year and capital goods within three years, and goods not returned in time can be treated as a supply by the principal. These limits are set by law and can be amended, so confirm the current position with your CA. In practice, the best protection is a system that shows what is overdue before the limit is close.
How TradeFlow records goods sent for job work
In TradeFlow, goods are sent out on a job-work challan. The challan records the job worker, their GSTIN and state, the process, the expected return date, and the products and quantities, and the goods can come from warehouse stock or directly from a supplier. When goods are sent from a warehouse, the stock leaves that warehouse and the movement is recorded against the challan. Quantities are recorded in kilograms, metres, litres or pieces.
Receiving material back
Each time material returns, TradeFlow records a receipt against the challan with one of three outcomes: received, transferred to another job worker, or loss and waste. A received item goes back into a warehouse and the stock movement is recorded. The system keeps sent quantity equal to received plus transferred plus lost plus pending, so the figures cannot drift. When every item on a challan has nothing pending, TradeFlow closes the challan automatically, with no separate step.
Watching what is overdue
The job-work page shows how much material is with job workers and how many returns are overdue, measured against the expected return date you set on each challan. TradeFlow does not track the legal one-year or three-year limits for you, and it does not send reminders; overdue items appear on the page and as exceptions when ITC-04 is prepared. Set realistic expected return dates and review the overdue list regularly.
How TradeFlow prepares ITC-04
TradeFlow prepares ITC-04 by half-year, April to September or October to March, from the job-work challans and receipts dated in that period. The working lists each challan item with the job worker’s GSTIN, product, HSN code and the quantities sent, received, transferred, lost and pending, along with a status. Value fields are left blank rather than guessed, so review the working with your CA before you file. TradeFlow raises exceptions for a missing job-worker GSTIN, quantities that do not reconcile and overdue returns, and it will not let you mark the working as filed while overdue or mismatch exceptions remain open.
Job-worker charges and GST
The job worker’s processing charge is a separate matter from the goods movement. TradeFlow records it as a job-work service invoice, which posts to the ledgers and to the GST records with the CGST, SGST or IGST split worked out from the states involved, in the same way as a supplier bill. That keeps the goods record and the charges record connected without mixing them.
Preparation, not filing
TradeFlow prepares the return data; the returns themselves are filed outside TradeFlow, by you or your CA. Marking a working as filed in TradeFlow records that it has been filed and locks it against later change, but it does not submit anything to the government’s systems.
Where TradeFlow fits
TradeFlow is an ERP for Indian traders, wholesalers, distributors and dealers, and includes job-work challans, receipts, overdue tracking and ITC-04 preparation. To see how it works for goods you send out, read the page on job work or the page for distributors.
FAQs
What is ITC-04 and who needs to track it?
ITC-04 is the GST statement of goods sent to and received from job workers. The registered person who sends the goods, the principal, reports it and needs a clear record of what was sent, returned and pending. Confirm applicability and frequency with your CA.
How can job-work transactions be tracked for GST?
Record each dispatch on a challan, record every return against it, and keep the job worker’s GSTIN. In TradeFlow, challans, receipts and the job worker’s charges are recorded, and ITC-04 data is prepared half-yearly from them.
Does TradeFlow file ITC-04?
No. TradeFlow prepares the ITC-04 working; the return itself is filed outside TradeFlow, by you or your CA.