User guide

Job work and yarn

Buying yarn, issuing it to weavers to weave your own designs, receiving the pieces back, paying the wage — and the returns the law asks of you for yarn sent out. Inventory → Job work

Yarn as stock

• Create yarn, dyes and other raw material as products marked raw material, in kilograms or hanks. Weight is held to the gram.
• Buy it on an ordinary purchase bill, naming the lot — the NHDC bale or dye-lot number — so yarn of one lot can be issued together.
• Yarn is valued at the branch's weighted average cost.

Placing a job-work order

1. New order: choose the weaver or society, the design they will weave, how many pieces, by when, and the wage per piece.
2. For each yarn, give how much one piece takes and the wastage allowed, e.g. 0.62 kg a piece with 3% allowed.
3. GST on the wage is 5% from a registered weaver and nil from an unregistered one.

Issuing yarn

On the order, Issue on challan: the quantity of each yarn, and the lot if you keep lots. It goes out on a numbered job-work challan (CGST Rule 55) at its average cost, with no tax and no voucher — the yarn is still yours. It must come back, woven or as yarn, within a year (section 143); the challan shows the date.

Receiving pieces and yarn

1. Receive: the pieces woven, the weaver's own challan number, and for tagged designs one tag per piece.
2. For each yarn, any wastage and any unused yarn handed back.
3. If wastage is more than the norm allows, choose to charge it to the weaver or write it off. Either needs someone with approval authority.

What happens in the books:

• The pieces come into stock at the yarn in them plus the wage.
• The wage is booked as the weaver's bill, which is paid like any supplier's.
• Wastage charged back is a separate journal against the weaver.
• Unused yarn goes back into stock in the lot it left.

Every gram is counted against the challan it went out on, oldest first.

Section 143 and ITC-04

Section 143 and ITC-04, from the job-work page:

• Yarn still with weavers — challan by challan, what is still out, its value, and the date it must be back by, flagged when due soon or overdue. Past the year, it is treated as supplied to the weaver on the day it went out, and tax is due with interest.
• ITC-04 — Table 4, goods sent to job workers, and Table 5A, goods received back (in finished goods, as inputs, or as wastage), for the half-year or the year depending on your turnover.