In re Best Money Gold Jewellery Limited ( GST AAR Kerala)
The AAR, Kerala, in the matter of M/s Best Money Gold Jewellery Ltd. [Advance Ruling No. KER/06/2023 dated March 02, 2023] ruled that value of gold will not diminish even if it is exchanged among 10 different users in a span of 2 years as a jewellery piece of 22 carats remains 22 carats even after changing hands. Thus, the term ‘second hand’ does not hold any meaning when it comes to items such as gold, land, currency. Accordingly, the assessee would not be eligible to value gold ornaments as per Rule 32(5) of the Central Goods and Services Tax Rules, 2017 (“the CGST Rules”).
Facts:
M/s. Best Money Gold Jewelry Ltd (“the Applicant”) is engaged in the business of buying and selling of old/second-hand gold jewellery from unregistered persons and make minor processing changes in the form of cleaning and polishing and sells them to other customers.
The Applicant submitted that since the jewellery was purchased from unregistered person and therefore, there was no scope for availment of the ITC as per Section 16 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”).
The Applicant filed an application for advance ruling before the AAR, Kerela seeking whether the Applicant qualifies to pay GST only on the difference between the selling price and purchase price as stipulated under Rule 32(5) of the CGST Rules.
Issue:
Whether the Applicant qualifies to pay GST only on the differential amount between the selling price and purchase price of second hand gold jewellery being equivalent to trading of second hand goods?
Held:
The AAR, Kerala, in Advance Ruling No. KER/06/2023 ruled as under:
