GST to be paid only on difference between Selling Price and Purchase Price of Second Hand Gold Jewellery purchased from individual: AAR [Read Order]

The Karnataka Authority of Advance Ruling (AAR) ruled that GST to be paid only on difference between selling price and purchase price of Second Hand gold jewellery purchased from individuals not registered under GST.

The applicant, Aadhya Gold Private Limited is  dealing in second hand goods and invoicing his supplies as "second hand goods", the valuation of supply of second hand gold jewellery which are purchased from individuals who are not registered under GST and there is no change in the form and nature of such goods, can be made as prescribed under sub-rule (5) of rule 32 of the Central Goods and Service Tax Rules.

The applicant has sought the advance ruling on the issue whether GST is to be paid only on the difference between the selling price and purchase price as stipulated under Rule 32(5) of CGST Rules, 2017, if applicant purchases used/second hand gold jewellery from individuals who are not dealers under the GST and at the time of sale there is no change in the form/nature of goods.

The Coram of Dr. M.P.Ravi Prasad and Mashood Ur Rehman Farooqui ruled that in the case of applicant dealing in second hand goods and invoicing his supplies as "second hand goods", the valuation of supply of second hand gold jewellery which are purchased from individuals who are not registered under GST and there is no change in the form and nature of such goods, can be made as prescribed under sub-rule (5) of rule 32 of the Central Goods and Service Tax Rules.

“It is seen that the applicant has admitted that he is purchasing used gold jewellery from individuals and selling the same, after cleaning and polishing them. The applicant has also admitted that he is not availing any input tax credit on the purchase of such goods and the goods so purchased are supplied 'as such'. The applicant has stated that he is not melting the jewellery to convert it into bullion and then remaking it to new jewellery but only cleaning the old jewelry and polishing it without changing the nature and form of the jewellery so purchased. These goods are then supplied to other persons. Further, the applicant admits that they are invoicing the goods as "used gold ornaments". Hence, the applicant satisfies the second condition also,” the AAR observed.

To Read the full text of the Order CLICK HERE

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