GST on second hand Jewellery
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Recently, the Karnataka bench of AAR has passed a very important ruling on Second-hand gold jewellery and it has been noticed by many experts that’s, this is going to give a significant impact on the industry.
The Karnataka AAR has passed a ruling in case of an application filed by the Aadhya Gold Private Limited “the Applicant”.’
The case has been filed by the applicant to clarify the fact that in the case of purchases of second-hand gold jewellery from individuals “whether GST is to be paid only on the difference between the selling price and the purchase price“or on the Gross sale value of the gold jewellery.
The fact of the case: – The applicant dealing in second-hand goods and invoicing his supplies as “second-hand goods” and the purchases of such kind of jewellery from an individual who are not registered under the GST and the applicant is selling such jewellery without any melting of any kind of modification in that jewellery.
Decision of the AAR
The AAR observed that GST is payable only on the margin amount between the sale price and purchase price in cases where gold jewellery is to be sold without any kind of modification. Since, in this case, there is neither any kind of melting of gold jewellery nor any change in form of jewellery. The applicant selling the jewellery just after cleaning and polishing without any transformation into any other form. So, GST would be charged only on the difference amount between sale and purchase price.
This decision is going to give a significant impact on the industry and will reduce the tax cost on the final consumer. At present, the industry usually charges three per cent on the gross value received from the purchaser.
Author Bio
Good article. Also need to understand your views on Purchasing the new jwellery by returning or selling old Gold Coins or Rings procured from the same Jweller and having GST invoice for the same.
It is really a nice and informative blog and the content is really precise. I liked your views on it. I will subscribe to it. I am looking forward for more such kind of blogs as they are really mesmerizing. Thanks for such an interesting and wonderful blog.
What about Banks auctioning Gold jewelry of their borrowers ? Whether GST will be applicable on auction price or difference between auction and purchase price of the borrower ?
First case was for sale of old & used automobile vehicle where the GST was made applicable on profit earned by the registered dealer.
Now it is the number of Old Gold Jewellery.
Next will be the number of all second hand & used goods.
Thank you for sharing.
My Pleasue
It will give benefit to lot of people .