In this guide 6 sections
Each job work challan should capture the item, quantity, date out, job worker, process, receipt back with date, and wastage or shortfall. Kept as one ledger, those fields let accounts read ITC-04 straight off the screen. Without the ledger, someone rebuilds every line from a challan book at return time.
Why the return is hard to rebuild from a challan book
ITC-04 reports goods you sent to job workers and goods that came back. Your CA files it. The lines come from your stores and your dispatch desk. That is where trouble starts.
A supplier in Chakan or Pimpri-Chinchwad may send forgings to a heat treatment shop on Monday and shafts to a plating unit on Tuesday. Housings go to a machining house on Thursday. Each trip leaves a challan, and each challan comes back, if it comes back, as a signed copy folded in a gate pocket.
At quarter end the accounts head sits with the book and a pile of returns. Which challans are still open? Which came back in two lots? Which job worker kept the scrap? Nobody knows. It takes a day of matching. A ledger answers all three in seconds.
The fields every outward challan must carry
Build the challan as a record first and a printout second. The printout is one view. The ledger row is what the accounts head will read months later, when the Chakan plating unit disputes a quantity.
Keep the item description tied to your item master, not typed fresh each time. A free-text entry such as shaft ground, shaft finished or SHFT-22 splits one part into three lines. Use one code and one unit of measure, whether that is numbers, kilograms or sets.
- Challan number, series and date out
- Job worker name, address and registration details
- Item code, description, quantity and unit
- Process sent for: plating, heat treatment, grinding or machining
- Value of goods sent, as per your valuation rule
- Vehicle number and expected return date
Recording the receipt back without losing the thread
Returns rarely match the outward lot. A batch of two hundred bushes may go out in one truck and return in three trips over nine days, so each receipt must cite the original challan.
Record each return against the outward row. Store the date in, the quantity accepted, the quantity rejected and the quantity that stayed with the job worker as processing loss. The open balance falls with each entry. At zero, the challan closes.
Rework is its own trip. A rejected plated part that goes back out is a fresh outward row that links to the first one. Otherwise the same bushes are counted twice.
- Receipt date and the job worker’s delivery note number
- Quantity accepted after incoming inspection
- Quantity rejected and the reason
- Wastage or scrap returned, with weight
- Balance still lying with the job worker
What a quarterly review of the ledger should show
Before the return is prepared, run an ageing view. Group open challans by job worker and by days outside. Anything that has stayed out for a long time needs a call, because the rules set a time limit on how long goods may remain with a job worker.
Your CA confirms the current limits and the form’s layout. The ledger only has to make the quantities easy to lift.
Check the totals too. Quantity sent, less quantity received, less recorded loss, should equal the open balance for each job worker. If not, a receipt sits against the wrong challan.
Moving from the challan book to a ledger in one quarter
Start with the open challans, not the history. List everything still outside today, one row each, and load it as opening balances. Then close the old challan book on a fixed date.
Then give the gate and the stores one screen to share. The gate scans the challan on exit and on return. Stores adds the inspection result. Accounts watches the balance.
Print this week’s open list for the next stores meeting. Ask each job worker to confirm the number against their own records. Differences found now are cheap to fix, and the same list becomes the opening balance of the new ledger.
Job work challan ledger sheet
Printed on a single page, the sheet has two blocks. The outward block has challan number, date out, job worker, item code, quantity, unit, process and expected return date. The inward block has receipt date, delivery note number, accepted, rejected, wastage, balance and days outside. A totals row checks sent against received plus loss.
Open a blank worksheet to printQuestions owners ask
Who fills in the ITC-04 return, accounts or stores?
Accounts or your CA files it. Stores and dispatch create the data. If the challan fields are complete when the goods move, filing becomes a matter of lifting figures, not chasing them.
What if a job worker returns goods in several lots?
Record every lot against the same outward challan. The balance shrinks with each receipt. Do not raise a fresh record for a partial return, or the open quantity will show wrongly.
How should scrap from heat treatment or machining be recorded?
Log it as a separate line on the receipt, with weight and the party that kept it. Scrap is part of the reconciliation. It explains why quantity received is lower than quantity sent.
Can a spreadsheet do this job?
For a handful of job workers, yes. Once several people write to it, or challans run into hundreds a month, a shared system with locked fields is safer than a sheet with many copies.