Job Worker Registration and Aggregate Turnover

Job Worker Registration explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

Two rules keep a job worker out of registration: the value of the principal's goods is not his turnover, and inter-State job work does not force registration. Take away the first — as happens when the principal is unregistered — and a small processor can find itself registered on turnover it never owned.

A job worker is liable to register only where his aggregate turnover exceeds the ordinary threshold — the Handbook states ₹20 lakh, or ₹10 lakh in special category States for services. Section 24(i) would otherwise compel registration for inter-State taxable supply, but Notification No. 10/2017-Integrated Tax dated 13.10.2017 exempted suppliers of services from that, as confirmed by Circular No. 38/12/2018. By explanation (ii) to section 22, the value of the principal's goods is excluded from the registered job worker's aggregate turnover. Where both principal and job worker are unregistered, that exclusion is unavailable and the value of the goods enters the job worker's turnover.

The ordinary threshold applies

"The job worker shall be liable to be registered under GST in the State / Union territory, from where he makes a taxable supply of services, if his aggregate turnover in a financial year exceeds ₹20 lakh / ₹10 lakh in special category States."

What is being measured is the job work charge — the fee for the treatment or process — not the value of the goods he is working on.

Inter-State job work does not force registration

This is the rule that most often surprises, because section 24(i) appears to say the opposite.

"in terms of Circular No. 38/12/2018 dated March 26, 2018, it has been clarified that though Clause (i) of Section 24 of the CGST Act, 2017 mandates registration for making inter-State taxable supply irrespective of threshold limit, vide Notification No. 10/2017-Integrated Tax dated October 13, 2017, exemption from mandatory registration was granted in case of supply of services."

The conclusion the Handbook draws:

"Hence, a job worker is required to obtain registration only in cases where his aggregate turnover, to be computed on all India basis, in a financial year exceeds the threshold limit — regardless of whether the principal and the job worker are located in the same State or in different States."

So a small job worker in one State may work on goods belonging to a principal in another without registering. The job work supply is a supply of services, and Notification No. 10/2017-IT lifts the section 24(i) compulsion for services.

Two limits on that relief. It applies to services — a person whose supplies include inter-State supply of goods does not get it. And it is a relief from the compulsion, not from the threshold; once aggregate turnover crosses the limit, registration follows.

Explanation (ii) to section 22: whose turnover the goods are

The mechanism that keeps the goods out of the job worker's turnover:

"for the purposes of determining the value of the job work charges as per explanation (ii) to section 22 of the CGST Act, 2017, the value of the goods supplied by the principal shall not be included in the aggregate turnover of the registered job worker. This means that as the liability to discharge tax under section 143 would lie on the principal, the job worker would not include the same in his value for the purpose of calculating the threshold limits."

And the same rule appears again on the supply side. Where goods are supplied to a customer from the job worker's premises after job work: "The supply of goods, after completion of job work, by a registered job worker shall be treated as the supply of goods by the principal and the value of such goods shall not be included in the aggregate turnover of the registered job worker."

Read the two together and the design is clear. The goods belong to the principal, the tax on them is the principal's, and the turnover they represent is the principal's. The job worker's turnover is his fee.

The trap: two unregistered parties

Here the protection falls away, and the Handbook is explicit:

"But in a case where an unregistered job-worker receives goods from an unregistered principal then this benefit will not be available to him and value of the supply of goods of unregistered principal, after completion of job work, by the job-worker shall be treated as the supply of goods by him and the value of such goods shall be included in the aggregate turnover of the job worker. As a result, the job-worker's aggregate turnover may cross the threshold and become liable to be registered."

Trace why. The relief in explanation (ii) attaches to a registered job worker working for a registered principal — because section 2(68) requires the goods to belong to another registered person, and section 143 places the liability on the principal. With an unregistered principal there is no section 143 liability to point to, the activity is not job work, and the goods leaving the processor's premises look like his supply of goods.

The commercial consequence is severe. A processor charging ₹2 lakh a year in fees, working on materials worth ₹80 lakh, is comfortably below the threshold on his own income and comfortably above it on the deemed value of the goods.

The practical answer is on the principal's side. A processor asked to work for an unregistered principal should understand what it costs him; a principal below the threshold who wants to use job work needs to register voluntarily under section 25(3) for the arrangement to be job work at all.

Where the job worker's registration status matters elsewhere

Registration status is not only a threshold question — it changes three other outcomes:

Supply from the job worker's premises. Under the proviso to section 143(1)(b), the principal may not supply from the job worker's place of business unless he declares it as his additional place of business — except where the job worker is registered under section 25, or the goods are notified by the Commissioner. Supplying from the job worker's premises →

Waste and scrap. Under section 143(5), waste and scrap may be supplied by the job worker from his own premises if he is registered; if he is not, it is supplied by the principal. Waste and scrap →

GST on the job work charges. "On the job work charges, GST will be charged by the job worker if the job worker is registered. Input Tax Credit of the same can be availed by the principal." An unregistered job worker charges nothing, and there is no credit for the principal to take.

Key takeaways

• A job worker registers only on crossing the ordinary threshold — ₹20 lakh / ₹10 lakh for services.
• Section 24(i) does not compel registration for inter-State job work: Notification No. 10/2017-IT dated 13.10.2017 exempts suppliers of services, per Circular No. 38/12/2018.
• The location of the principal is irrelevant to the job worker's registration liability.
• Explanation (ii) to section 22 keeps the principal's goods out of the registered job worker's turnover.
• Goods supplied from a registered job worker's premises are the principal's supply, not his.
• Where both parties are unregistered, the value of the goods enters the job worker's turnover and can force registration.
• A principal below the threshold must register voluntarily for the arrangement to be job work at all.
• Registration status also decides premises supply, waste and scrap, and whether GST is charged on the fee.

Read next

• Section 2(68): Job Work Needs a Registered Principal
• Supplying Directly From the Job Worker's Premises
• Waste and Scrap Generated During Job Work

Disclaimer: Positions stated as on 5 September 2026, based on sections 2(68), 22, 24, 25 and 143 of the CGST Act, 2017, Notification No. 10/2017-Integrated Tax dated 13 October 2017 and Circular No. 38/12/2018-GST dated 26 March 2018, as reproduced in the ICAI Handbook on Job Work under GST (4th edition, June 2026).