HSN Code for Job Work and Manpower Supply

Job work takes a service accounting code from heading 9988 — manufacturing services on physical inputs owned by others. Not an HSN, even though the whole activity is about goods, and even though a job worker's premises look exactly like a factory. The tariff's view is that the goods never became yours, so what you sold was the process.

What job work is under Section 2(68)

The definition is short: any treatment or process undertaken by a person on goods belonging to another registered person. Two conditions are embedded in it.

First, the goods must belong to someone else throughout. If you buy the raw material, process it and sell the finished article, you have made a supply of goods, not job work — even if the buyer specified the design and the whole run was made to their order. Second, that someone else must be registered. Processing goods for an unregistered person is a taxable service, but it is not job work within the meaning of the Act, which matters because the Section 143 procedure and the ITC-04 mechanism are both keyed to registered principals.

The scale of the processing is irrelevant. Schedule II makes any treatment or process on another person's goods a supply of services, whether that is putting a label on a bottle or converting a coil into a finished component.

Heading 9988: manufacturing services on inputs owned by others

Heading 9988 is grouped by the industry the processing belongs to, which is unusual — most service headings group by the nature of the service. In practice you pick the group that matches what is being made, then the six-digit code within it.

The groups under 9988

998898 carries a great deal of traffic because it is the safe residual, but it should be a last resort. If you galvanise steel brackets, 99887 describes the work; if you dye fabric, 99882 does. A specific code is easier to defend than a residual one and costs nothing extra to use.

Job work versus manpower supply versus works contract

Fabrication is where all three meet. Fabricating the customer's own steel in your workshop is job work. Sending welders to work under the customer's supervision is manpower supply — see our note on labour charges. Fabricating and erecting a structure onto a building, with your material, is a works contract — see works contract classification.

Section 143: sending goods out without paying tax

Section 143 is the reason the job work economy works at all. A registered principal may send inputs or capital goods to a job worker without payment of tax, under intimation and subject to conditions, and may send them on from one job worker to another. The goods must then be either brought back to a place of business or supplied directly from the job worker's premises within the prescribed period:

• One year for inputs.
• Three years for capital goods.
• Moulds, dies, jigs and fixtures and tools sent for job work are outside the time limit.

Movement happens on a delivery challan rather than a tax invoice, and the principal reports the position in Form ITC-04, whose filing frequency depends on turnover. If the goods are not returned or supplied onward in time, the original despatch is deemed a supply on the date it was sent out — with tax and interest running from then, not from the date the breach is noticed. That retrospective effect is the whole risk.

Note also that supplying goods directly from the job worker's premises requires the job worker's place to be declared as an additional place of business unless the job worker is registered — a detail that quietly catches principals who start drop-shipping from a vendor's factory.

Rates

Job work rates are set by industry-specific entries in the rate notification rather than by a single line, and several entries distinguish job work done for a registered principal from other manufacturing services. Those entries have been amended repeatedly, so this article does not reproduce them. Check the current entry for your specific group on the CBIC GST portal, and see our overview of the current rate slabs for the structure.

Documentation that survives a query

Job work disputes are almost never about the code. They are about whether the goods came back.

1. Keep the challan trail intact. Every movement out, between job workers, and back needs a delivery challan, and the challan numbers must reconcile to the ITC-04.
2. Track the clock per despatch, not per vendor. The one-year and three-year limits run from the date each consignment left, and a long-running relationship hides individual consignments that never came back.
3. Confirm the principal is registered — and stays registered. The whole Section 143 machinery, and the definition of job work itself, depends on the principal being a registered person. A principal whose registration is cancelled mid-contract changes the character of what you are supplying. A periodic check of the counterparty's GSTIN against live registration records, as covered in our guide to automated GSTIN monitoring, flags that before it becomes a reconstruction exercise.
4. Report at the required digit level for your aggregate annual turnover — see the digit rules.

Frequently asked questions