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Subcontracting process- Suncontracting Vendor delivers finished product directly to Customer

Dec 08, 2017 at 03:33 AM

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Former Member

Please advise on the following Business process:

Shubhalakshmi Polyesters Ltd—Manufacturer of PSF.

Longowalla Yarns Ltd--- Job Worker (Conversion of PSF Yarns to Fabric).

Aayat Processors --- Final Customer of Fabrics

We are going to send PSF for Job work to Job Worker on delivery challan without GST.

The Job worker party will send complete money of PSF to our company (As a security—Advance payment).

After Job Work, Job Worker will send Fabric to final Customer and raise invoice of Job work to our company (with GST 5%—With Consignee—Aayat as final Customer).

Our Company will raise final invoice (Fabric) to Customer.

After getting money from Final Customer, we will return back PSF Advance to Job Work and pay him Job charges for conversion of PSF to Fabric.

How to handle the above scenario.

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1 Answer

Jürgen L
Dec 08, 2017 at 06:07 AM
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What did you already try and where did it fail?

If you put this search string in Google then you will see that there have been many similar questions as well as blogs: Subcontracting Vendor delivers directly to Customer

And some functions are just there no matter if it is subcontract scenario or standard purchase

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